EU-Thailand Free Trade Agreement - current developments -
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1 EU-Thailand Free Trade Agreement - current developments - Eastin Grand Hotel Sathorn Presentation to the Austrian Business Delegation to Thailand 12 March 2012 Mr. Pekka Penttila Trade Attaché pekka.penttila@eeas.europa.eu
2 Agenda Trade Policy Agenda Bilateral Agreements EU-Thailand Trade relations EU-Thailand FTA current developments
3 1. Today s context
4 1. Benefits of Trade What? Economic growth: 1% added to EU s GDP by 2020 on completion of negotiations with strategic partners. If US and Japan then 2% to EU s GDP or equivalent to 240 billion euros by Consumer benefits: Variety of products & lower prices, gains estimated in the range of 600 Euros per year per consumer. Labour effects: 25m jobs depend on exports, > 4.6 m people work for US/Jap majority owned companies
5 1. Trade policy agenda* *Trade, Growth and World Affairs
6 1. Investment policy
7 1. Reaching beyond borders
8 1. How we negotiate
9 2. Bilateral relations ( FTAs)
10 2. Bilateral Agreements- State of Play
11 2.Bilateral Agreements- the way ahead
12 2. FTA partners and trade in goods
13 2. EU: Covering all the bases? Anchoring them in an open trading system?
14 3. EU-Thailand trade relations (1) EU is Thailand s 4 th trade partner after ASEAN, Japan, China 32 bil worth of trade (2011) EU is Thailand s 3 rd largest export market 11% of total exports, after ASEAN and China Thai exports to the EU = 17.5 bil (2011) Imports from EU = 11.9 bil (2011) EU Trade Deficit with Thailand = 5.7 bil
15 3. EU-Thailand trade relations (2) As upper middle income country Thailand will exit from GSP benefits 2015!
16 3. EU-Thailand trade relations (4)
17 3. EU is a top investor in Thailand EU is Thailand s 2 nd biggest source of FDI after Japan
18 4. Potential gains for EU in an FTA with Thailand Adding further momentum to the longerterm regional approach important building blocks towards the ultimate goal; Putting the EU at least on par with partners who have concluded FTA with Thailand or ASEAN (China, India, Japan, Korea, Australia, New Zealand); and Creating substantial economic gains for EU
19 4. Economic gains for the EU (1) Trade in goods: for example Duty savings: total amount of duties payable (2011) was around 1.05 billion of which 920 billion absorbed by industrial products. EU offensive exports: TH has high tariffs on EU offensive exports interest e.g., agricultural products, motor vehicles, electronics and engines EU interests in the Thai markets: Machinery, automotives (TH has FTA with Japan), pharmaceutical, alcoholic beverages, foodstuffs.
20 4. Thailand Level playing field is important
21 4. Transitional periods e.g. steel
22 4. Transitional periods e.g. EEE
23 4. Transitional period e.g. spirits
24 4.Economic gains for the EU (2) Trade in goods: Others Rules of origin (e.g., coherence, ASEAN cumulation) Non-tariff measures (e.g., import licensing, export licensing, export taxes) Customs and trade facilitation (e.g., customs procedures implementation and customs law) Technical barriers to trade (e.g., risk-based approach to conformity assessment, ASEAN harmonization) SPS (e.g., control, inspection and approval system requirements for imports of animal and animal products, system audits Vs establishment-by-establishment audits)
25 4. Economic gains for the EU (3) Other trade areas: Services (e.g., FBA, US Treaty of Amity, financial services, telecom, postal courier, construction, transport, business services) Investment (e.g., legal certainty and predictability, market access, investment protection) Public procurement (around 3-5% of TH GDP thus potential gain for the EU, GPA membership) Intellectual Property (e.g., GIs, copyrights, trademarks, watch lists, access to medicine [defensive]) Competition Policy (antitrust, subsidies, SOEs) Trade and sustainable development (e.g., environment standards) would be first time for Thailand
26 Thailand s possible expectations Preservation of GSP benefits Mode 4 (movement of natural persons) Agricultural products (e.g., sugar, poultry, rice, tuna) Non-tariff barriers (e.g., standards, MRAs) SPS
27 Thailand s concessions in services and investment so far Thailand has not granted any substantial concessions in services trade in any of its FTAs US-Thailand Treaty of Amity investments in some sectors are thus de facto open for US companies Japan-Thailand FTA: some (limited) additional concessions on services and investment, mainly to facility automotive production and related establishment of companies in Thailand
28 NEXT STEPS The first round of negotiations with Thailand is foreseen to take place in May Three rounds of negotiations per year. Thailand has expressed determination to conclude the FTA within a two-year timeframe EU Commission will have to maintain balance in allocating resources to FTA with Thailand and other (more demanding) bilateral FTAs such as that with Japan and US.
29 Thank you for your attention! Question & Answers
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