PRESS RELEASE THE THAILAND - EU FTA: A PARTNERSHIP FOR GROWTH Bangkok, 15 May 2013 – The European business community in Thailand, through the European - ASEAN Business Centre (EABC), the quasi European Chamber of Commerce, today announced its strong support for the Thailand - EU Free Trade Agreement (FTA) process. The benefits of the FTA include both direct economic gains as well as a range of significant social and developmental benefits that will help create a virtuous cycle of growth that in turn will advance Thailand to a higher level of national prosperity. The EABC encouraged both parties in the negotiations to move forward without delay in order to maximise Thailand’s potential benefits from a finalised agreement. The economic benefits for Thailand from a Thailand - EU FTA have been clearly articulated by the Thailand Development Research Institute (TDRI), which published results of models that showed Thailand always achieved significantly higher GDP growth with the FTA versus if it opted out of the agreement. Further a recent study found that in the short term, EU imports from Thailand will grow 6.7% or, 950 million EUR in a year. According to another study prepared for the board of trade, additional Thai GDP growth could reach 0.56%. “The EABC represents the full range of European businesses operating in the Kingdom and we are committed to fostering growth and prosperity in Thailand,” said Rolf-Dieter Daniel, President of the EABC. “I would like to make it clear that we are very much a part of the local economy and that a peaceful, productive and prosperous Thailand is vital to the success of European companies operating here. Further, we have actively developed and published in-depth policy and regulatory recommendations based on our experience and in consultation with the government. We believe that the Thailand - EU FTA will create a true partnership for growth by facilitating trade, encouraging greater EU investments in key elements of Thailand’s service sector and driving technology and knowledge transfer that will benefit Thailand and its people.” The FTA reduces barriers to increased EU investment in Thailand’s service sector, which is a critical requirement for the country to advance to the next level of economic development. Unfortunately Thailand’s service sector has been underperforming due to low labour productivity and a lack of investment. For example, manufacturing accounts for just 21% of the labour force but generates 41% of the GDP, while services account for 41% of the labour force and generates 50% of the GDP. 1
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By encouraging greater EU engagement with service
“Middle Income Trap and the Thai Service Sector”, TDRI, February 2013
European-ASEAN Business Centre (EABC) 25th Floor, Empire Tower, 195 South Sathorn Road, Yannawa, Sathorn, Bangkok 10120 – Thailand Phone: +66 2670 0624 Fax: +66 2670 0608 www.eabc-thailand.eu office@eabc-thailand.eu
industries in Thailand, with concurrent knowledge transfers, the FTA can help address the labour productivity issue and grow this sector. This will have a positive impact on the wider economy because the service sector is also critical for the efficient production and distribution of goods. The EABC highlighted the point that the FTA, rather than creating a new trade relationship, is reinforcing a well-established and profitable relationship for Thailand. Data from EUROSTAT show that the EU is Thailand’s third largest trading partner, and Thailand is the EU’s 3rd largest trading partner in ASEAN. The EU is also the largest investor in ASEAN.
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Further, for many years the balance of trade has been in Thailand’s favour. The FTA will create greater opportunities for Thai goods and services to enter the European market. “An argument that is raised against the FTA is that Thailand is not ready to compete against the EU. We do not accept this position for several reasons. In the first place the FTA facilitates joint economic development through fair trade and investment – not a winner-takeall model of competition. Two, the Thai economy has shown itself to be highly resilient, based, as it is, on a mix of manufacturing, services and agriculture. Thus, Thailand is ready to benefit from the increased market access provided by the FTA. Three, the current FTA negotiations are not taking place in a vacuum and Malaysia, Singapore and Vietnam are already engaged in similar negotiations. If Thailand does not advance this process it risks being left at a disadvantage vis-à-vis its neighbours” continued Mr. Daniel. The Thailand - EU FTA will also create a virtuous cycle in which the Thai economy will become an increasingly attractive place for businesses to invest and operate as well as being more globally competitive. By encouraging regulatory changes related to business operations and foreign investment, the country can attract greater inflows of capital investment, which in turn will lead to technology and skills transfers that will boost the potential of domestic enterprises. “We believe that by entering this partnership for growth via the Thailand-EU FTA, Thailand will enhance its economic competitiveness and secure its prosperity for decades to come. As the EABC’s members are intimately linked to the long-term success of Thailand, we are very pleased to see the Royal Thai Government moving forward with the FTA negotiations in a transparent and visionary manner and we will do all that we can to help ensure that the FTA process will be concluded swiftly and in a mutually beneficial way,” concluded Mr. Daniel.
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http://ec.europa.eu/trade/policy/countries-and-regions/regions/asean/ European Commission 2013
European-ASEAN Business Centre (EABC) 25th Floor, Empire Tower, 195 South Sathorn Road, Yannawa, Sathorn, Bangkok 10120 – Thailand Phone: +66 2670 0624 Fax: +66 2670 0608 www.eabc-thailand.eu office@eabc-thailand.eu
About EABC The European ASEAN Business Centre (EABC) is a European Trade Organisation contributing to improve the trade and investment environment for European companies in Thailand with an aim to see a larger number of European companies (especially SMEs) being established in Thailand and increased export and investment by European companies into Thailand. For any media enquiries or further information, please contact: Aziam Burson-Marsteller Hongsinunt Somboonwanna – 02-252-9871 / hongsinunt.s@abm.co.th Jeremy Plotnick – 02-252-9871 / jeremy.plotnick@abm.co.th European ASEAN Business Centre (EABC) Khun Saiwaroon Tiranonrungrueng - Tel: 02 670 0624; Fax: 02 670 0608 / communication@eabc-thailand.eu or visit: www.eabc-thailand.eu
European-ASEAN Business Centre (EABC) 25th Floor, Empire Tower, 195 South Sathorn Road, Yannawa, Sathorn, Bangkok 10120 – Thailand Phone: +66 2670 0624 Fax: +66 2670 0608 www.eabc-thailand.eu office@eabc-thailand.eu