Veteran 63-year-old minister is coordinating negotiations between the 16 member states that are party to the huge economic partnership. He is working towards an official announcement by leaders at the summit which would also represent a shift in global power and influence towards the Pacific.
The ASEAN summit which takes place in Bangkok on November 4th and 5th of next month may see some very welcome good news for Thailand if the finalisation of the Regional Comprehensive Economic Partnership can be achieved and announced. This week, Thailand’s Commerce Minister announced that this was the goal of negotiators currently work hard at putting the pact to bed.
This would represent the dawning of the world’s biggest free trade area within the Pacific region, something especially welcome in the light of the disruption that Thailand’s exports have experienced this year with recent figures from the World Bank quoting a contraction of over 5%. The kingdom came into the year hopeful of significant growth.
End of a difficult year, straining to achieve 3% growth
Thailand’s economic planners are still holding out for a 3% growth rate this year despite indications that it will be marginally lower based on an assessment by the Bank of Thailand and the World Bank. It is hoped that a pick up in consumer confidence buoyed by government stimulus and a strong high season for tourism may do the trick.
A shot in the arm, a boost for the Thai economy and exporters if the deal is sealed on November 4th
However, the government is also hoping to receive a boost of confidence when it is hosts that upcoming ASEAN summit in Bangkok with the unveiling of a completed trade deal for the 16 nation Regional Comprehensive Economic Partnership which can then go into effect next year. This would be a major boost to the economic confidence of the country and an impetus for Thailand’s exporters.
European Union invites Thailand to talks
It comes in the week when the European Union confirmed its willingness to open trade talks with Thailand something that the Thai government has been preparing for and working towards a decision of its own on whether to accept the invitation.
However, dealing with the European Union is notoriously difficult and any such talks even after they convene, will take a long time to bear fruit. Even if a deal is complete, it is then subject to internal politics with the European Union which can make for a disorderly confirmation process.
The current tribulations with the EU-Mercosur trade agreement that took 20 years to negotiate, give an insight into how difficult the process can be as the European Union is now more prone to conflate trade with political, social and environmental issues.
16 nation free trade area in the Pacific with ASEAN and 6 other key trading nations
The RCEP trade area would comprise of ASEAN and six key trading nations including Japan, China, India, South Korea, Australia and New Zealand.
Trade talks have dragged on within the project since 2012 but it is now understood that 16 chapters of 20 have been completed in the negotiations and negotiators are preparing to announce an agreement on November 4th in Bangkok.
Already over 80% of trade between the 16 countries would be freed from trade restrictions under the terms ironed out and it is envisaged that by the time the package is announced at the summit, this will be 84% of the combined market, an economic colossus.
Offers Thailand’s exporters more stability and new opportunities to forge market share
It is hoped that the effect of the trade deal even in the short to medium term, would be to reset somewhat Thailand’s position in the aftermath of the US-China trade war which has been significant disruption. In the longer term, it offers opportunities to companies and exporters to go out and engage more with the Pacific region.
Thai Commerce Minister in the driver’s seat
The man at the centre of efforts to get the trade deal over the line is Thailand’s commerce minister Jurin Laksanawisit. A former public health minister in the government of Abhisit Vejjajiva, his role as commerce minister in this government is now about opening up more markets to Thailand after the trade war debacle.
Thailand currently chairs the ASEAN bloc which is at the centre of the new free trade area and the deal will also be a significant boost for the 10 nation community.
This week, the minister explained that the outcome of intensive talks still underway will be forwarded to the leadership of all countries and an announcement will be made at the forthcoming summit which Thailand will host from November 4th to the 5th.
A market with 3.5 billion people and half the world
The proposed new free trade agreement would give Thai exporters access to a market of 3.5 billion people containing over half of the world’s population and will be the biggest free trade area in the world, accounting for 39% of global GDP.