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Thailand will undoubtedly welcome President Barack Obama warmly this weekend, and is expected to announce its interest in pursuing membership in the Trans-Pacific Partnership trade agreement.
This is an important milestone: it boosts the TPP’s prospects for success; improves the chances for Asia-Pacific free trade; and gives a further “thumbs up” to economic ties between Southeast Asia and the United States.Originally a four-country trade agreement among Brunei, Chile, Singapore and New Zealand, the TPP now has 11 negotiating members on both sides of the Pacific, and could become the biggest trade agreement since the Uruguay Round.
It is a huge, positive-sum game that promises benefits to all members and could help to define the trading rules of the 21st century.
If Thailand joins the TPP, it would be one of its biggest beneficiaries.
Estimates that colleagues and I have done at the East-West Center and the Peterson Institute for International Economics show that the TPP would generate global income gains of $451 billion per year in 2025, assuming that Japan, Korea, Indonesia, the Philippines and Thailand eventually join the 11 countries now negotiating.
That is more than what the Doha Round could deliver, even if completed.We also estimate that Thailand would have the second-largest percentage gains among potential members, with incomes rising by 7.6 percent as a result of a TPP agreement – only Vietnam would do better. The United States would gain more in dollar terms, but its percentage gains would be only 0.5 percent of GDP.Thailand’s large potential gains are explained by its unusual trading position.
As Southeast Asia’s main mid-level manufacturing hub, Thailand has powerful clusters in automobiles, computers and telecommunications, industries with fluid global production bases. Due partly to rising wages and slowing growth in China, Thailand is now poised to gain market shares, particularly in North America.
These manufacturing strengths are also reinforced by Thailand’s strategic role in services – banking, transport and logistics – including in the dynamic, emerging economies to its west.
But is Thailand entering the negotiations too late?
In the past two and a half years of negotiations much groundwork has been done, but the truth is that the hardest issues have been on hold until now, awaiting the outcome of the U.S. presidential election.
So if Thailand moves quickly enough – and it is still unclear whether it can do so – it can still make its opinions count on important choices.
It will not be easy to finish the TPP negotiations, or for Thailand to join. The goals include high, “21st century” standards for many economic linkages, including services, investment, and intellectual property. What makes the TPP so complicated to negotiate is that it is designed to benefit both emerging and advanced economies. But that is also its most valuable feature; a successful TPP could help to grow trade across a wide range of partners.
But Thailand official news website denied actual signs of signing the TPP anytime soon
Prime Minister Yingluck Shinawatra on Saturday asserted that the government has not made any decisions on the signing of the Trans-Pacific Strategic Economic Partnership Agreement (TPP).
Before leaving for Cambodia to attend the 21st ASEAN Summit and related meetings in Phnom Penh, Ms Yingluck told reporters that the government has just shown intention to study the TPP but have not yet signed anything.
The Commerce Ministry has been assigned to study the pros and cons and possible impacts that may occur if Thailand signs or does not sign the agreement, she said.
Any talks on the agreement must be based on the country’s readiness and potential benefits, she said, adding that the deal must be agreed upon at the cabinet level and required ratification from the Parliament. There are four counties in ASEAN that have signed the TPP, and Thailand has not made any decision over the issue, she said.
Ms Yingluck also affirmed that she would not raised the TPP issue for discussion with US President Barack Obama when he visited Thailand on Sunday.
The premier also said regarding the preparations to welcome Mr Obama that National Police Chief Pol Gen Adul Saengsingkaew has assured that there would be no problems, particularly with security measures. (MCOT online news)