Few big winners so far from Japan trade pact
After one year, many hurdles remain
Bangkok Post – 5 November 2008
ACHARA ASHAYAGACHAT
Only exporters of processed chicken and seafood products have directly benefited so far from the Japan-Thailand free trade agreement, say experts.
Co-operative programmes involving various sectors in the two countries have yet to start, said speakers at a Foreign Ministry conference on the first anniversary of the Japan-Thailand Economic Partnership Agreement (JTEPA).
Rangsit Phusiripinyo, an official with the Agricultural Fiscal Policy Office, said farm products that already enjoyed trade benefits with Japan had recorded a 24% increase in exports since the agreement was signed.
Thai meat and seafood exports to Japan rose 36% year-on-year to 30 billion baht in the first nine months of 2008.
Processed chicken and fish exporters have eagerly sought to take advantage of the trade pact. Seventy-nine percent of processed shrimp exporters and 80% of black tiger prawn exporters have applied for benefits, Ms Rangsit said.
Negotiators intended farm products would be the main beneficiaries of the deal, which took effect on Nov 1, 2007.
Narumon Sa-nguanwong, of the Office of the Agricultural Industrial Standards, said the JTEPA had had no impact on small-scale farmers, as they were not major exporters in the first place.
The agreement has had the greatest impact on contract farmers, she said, adding that Thai farm products that had yet to establish standards risked missing out on benefits.
Ms Narumon said Japan had 22 farm products on its quarantine list. The treaty calls for a joint food safety committee but it has yet to be formed.
But Paichayont Uarthavekul, a representative of Swift, a major exporter of fruit and vegetables to Japan, said exports of Thai fruit and vegetables had dropped as certain trade barriers remained despite the agreement.
"It took eight years before we could export mangosteen to Japan, yet we still have problems," he said. "Now asparagus shipments to Japan has decreased 3% and trade volume and value will continue to drop unless the government helps."
He agreed that substandard products were a problem, but added that redundant regulations and non-tariff barriers were another complication.
"Thai authorities need to negotiate with Japan. We should be able to compete in certain segments. Consider that pineapples are allowed under the JTEPA but restricted by size, although the Philippines is able to export [to Japan]."
Virachai Vongbunsin, a director with the Thai Board of Trade, said that only 55% of Thai business had sought JTEPA privileges compared 70% seeking benefits under the Thai-Australian FTA.
Paiboon Ponsuwanna, a vice-chairman of the Federation of Thai Industries, said the rules under the Thai-Japan agreement were difficult to understand.
He said Thailand should establish a one-stop centre to help businesses affected by the agreement.
Vilaivan Tapwongsri, from the Commerce Ministry's Bureau of Trade Preferences, said more businesses should tap the 160 million baht set aside to aid companies affected by the pact.
The Agriculture Ministry has a similar fund but has seen few applicants.
Somkiat Tangkitvanich of the Thailand Development Research Institute said the JTEPA had had no direct impact on Japanese investment in Thailand. He said Japanese companies were more apt to invest in Thailand to take advantage of the country's trade deals with the likes of Australia, India and Europe.
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