EU, Thailand Launch FTA Negotiations

In Brussels, on March 6, 2013, European Commission President José Manuel Barroso and the Thai Prime Minister Yingluck Shinawatra formally launched negotiations for a free trade agreement (FTA) between the European Union (EU) and Thailand.

The ambition is to conclude a comprehensive agreement covering tariffs, non-tariff barriers and other trade related issues, such as services, investment, procurement, regulatory issues, competition, and sustainable development.

The proposed FTA could be expected to strengthen commercial and investment relations between Thailand and the EU, including the promotion of tourism. Total bilateral trade would be expected to increase, with the FTA reducing import tariffs by more than the current General System of Preferences for Thai goods exported into Europe.

The launch of FTA negotiations would thereby mark a further step in EU-Thai relations, already strengthened by a Partnership and Cooperation Agreement. The first negotiating round is expected to take place before the summer break, and an agreement could be concluded within two years.

Thailand is the EU's third largest trading partner inside the 10-member Association of Southeast Asian Nations (ASEAN), and the EU is Thailand’s third largest trading partner, with total trade between them in 2012 reaching EUR31.7bn (USD41.2bn). The EU is also one of the largest investors in Thailand with investment stocks worth over EUR14bn in 2011.

EU exports are dominated by machinery and electrical appliances, pharmaceutical products, vehicles, precious metals and optical instruments. Thailand’s key export items include machinery and electrical appliances, foodstuffs, plastics/rubber, vehicles and precious metals/pearls.

Thailand is the latest in a series of ASEAN countries to negotiate an FTA with the EU. At the end of 2012, the EU successfully concluded negotiations with Singapore and has been negotiating with Malaysia and Vietnam since 2010 and 2012 respectively. It was also recently announced that FTA talks are also expected with Indonesia.

The EU began its policy of sealing bilateral deals with individual ASEAN countries in December 2009 when EU member states gave the green light for the European Commission to push for FTAs. While pursuing this bilateral approach, the EU's ultimate goal is a regional agreement with ASEAN as a whole – a goal which it had to abandon earlier in 2009 after fruitless negotiations that began in 2007.

March 11, 2013

Source: Tax News