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1 Chutima Bunyapraphasara Deputy Director-General Department of Trade Negotiations Free Trade Successes & Thailand Automotive Industry.

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Presentation on theme: "1 Chutima Bunyapraphasara Deputy Director-General Department of Trade Negotiations Free Trade Successes & Thailand Automotive Industry."— Presentation transcript:

1 1 Chutima Bunyapraphasara Deputy Director-General Department of Trade Negotiations Free Trade Successes & Thailand Automotive Industry

2 2 Global Economic Situation WTO Negoti ations Slow Global Trade Liberalizat ion More RTAs/ FTAs WTO RTAs/FT A

3 3 Rapid Increase in RTAs and FTAs 70% as Bilateral FTAs Source : WTO RTAs and FTAs

4 4 Removal of Trade Obstacles (Tariffs and NTMs) Expand Trade and Export Opportunities ( both existing and new markets) Attract Foreign Direct Investment Increase Competitiveness and Efficiency Promote Long-term Relationship Raise International Bargaining Power FTA Objectives

5 5 Thailands’ Future Goals Top 5 Investment Destination in Asia Top 20 World Exporter Strong and Sustainable Growth Dual Track Policy Trade and Investment Hub in Asia

6 6 8+1 FTAs Peru Japan Australia New Zealand BIMST-EC China India Bahrain USA Total trade with Thailand 43.8% Total trade with Thailand 43.8% Include AFTA 62.5% Include AFTA 62.5%

7 7 FTA Current Status/Target Date Start Negotiatio n End Negotiat ion Early Harvest China Japan U.S. Australia New Zealand India Bahrain Peru BIMST-EC Frame work

8 8  FTAs will be Comprehensive - include Automotive Sector, with flexibility for sensitive goods  FTAs deal only with border measures, such as tariffs, custom administration, and import licensing, and will not address domestic taxes, such as excise tax and luxury tax  Rules of Origin (ROO) will determine if products will receive preferential treatment FTAs and Automotive Sector

9 9 Tariff Reduction For passenger cars, most of the tariffs will be reduced to 30% in 2005 and phased out to zero by Tariff on passenger cars of a cylinder capacity exceeding 3,000 c.c., including ambulances, cars of jeep type, and others, will be removed immediately. Tariffs on Automotive Parts and Components will be phased out to zero by 2010 Rules of Origin Change of Tariff Classification (CTC) + Regional Value Content (RVC) of 40% (like AFTA formula) Thailand-Australia FTA

10 10  Negotiations on-going – but will probably take ASEAN- China FTA modality.  Normal Track/ Sensitive List  Tariff Schedules have yet to be determined  Rules of Origin:  Local Content 40 per cent  Product Specific Rules Thailand/ASEAN-China FTA

11 11  Negotiations on-going  Some automotive parts and components already in Early Harvest Agreement with the rest under negotiations  Rules of Origin (to be determined) Local Content 40 percent Substantial Transformation Thailand-India FTA

12 12  Market Access  Customs Procedures and Regulations  Technical Regulations/MRA  Cooperation on SMEs and Technical Training and Transfer Thailand-Japan and Thailand-U.S. FTA

13 13 Increase exports of automobiles and parts, especially light trucks, to FTA partner countries and world markets Enhance Competition and Efficiency of the Automotive Sector Attract more FDI Promote Cooperation and Networks- Know-how, R&D, and Innovations FTAs Potential Benefits

14 14 Increase vulnerability from outside forces. Increase Competitive level – Crowding out Effects. Social and Cultural Repurcussion (e.g. job loss, misplace resources, etc.) FTAs Potential Threats But Short-term and Adjustable + High Costs of Non- participation

15 15 Recommendations  Greater Cooperation and Coordination between All Stakeholders in both the Public and Private Sectors in FTAs negotiations and beyond  Joint Efforts to raise productive, efficiency, and international competitiveness (R&D, market and skill development, etc.)  Create a modern and globalized workforce

16 16  Specialization  Quality/Price Competitiveness  Strategic Partnership  Economies of Scale Recommendations

17 17


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