Prime Minister Prayut Chan-o-cha on Friday poured cold water on a call by an American business lobby group urging Thailand to join the controversial Trans Pacific Partnership (TPP) trade pact.
US-Asean Business Council delegates chat among themselves during their visit to Government House’s Santi Maitri Building where they met Prime Minister Prayut Chan-o-cha yesterday. (Photo by Thiti Wannamontha)
The premier said the pros and cons of the new trade bloc need to be considered thoroughly first.
“We didn’t talk about it,” Gen Prayut said in response to a reporter asking if visiting American businesspeople had invited Bangkok to join the free trade agreement pact that would cover nearly 40% of the global economy.
“I need to be careful of what I say about such a critical agreement that could make or break Thailand. All parties must be consulted, especially the Ministry of Public Health,” Gen Prayut said after he met some 60 executives from top American firms.
The US-Asean Business Council this week led a delegation of members from top US multinational corporations to Bangkok, having met with the premier and other economic ministers and the central bank governor to learn about the business and investment policies of the military-appointed government.
Among the executives who met with Gen Prayut were those of AIG, Citibank, Dow Chemical, Google, Guardian, Monsanto, Caterpillar, Chevron, Philip Morris, Procter & Gamble, Seagate and Visa.
Before meeting the prime minister, US-Asean Business Council CEO Alexander Feldman told local media that Thailand's accession to the TPP would increase American investment in Thailand, especially in the automotive sector, in which General Motors and Ford Motor have invested billions of dollars for nearly two decades.
After the meeting, Mr Feldman told the Bangkok Post he “didn’t have a chance” to raise this issue with the prime minister, but he said Bangkok should move ahead on the initial interest shown by the Yingluck Shinawatra government to join the TPP.
“This makes a lot of sense for Thailand where a lot of our members have a large presence,” Mr Feldman said, adding many US firms plan to boost their investment in Vietnam, one of the 12 economies participating in the talks on the US-led trade pact.
Last month in Hawaii, trade ministers from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam failed to reach a deal on the new trade agreement and have not set a date for future talks.
The July talks ranged from tariffs on automotive, rice and dairy products, to intellectual property protections for pharmaceuticals.
Mr Feldman said if Thailand became a member of the TPP, cars and trucks made by Ford and General Motors in Thailand could be sold in Japan.
Critics have complained that the deal is being negotiated in secret and that it favours large corporations over workers and consumers.
Mr Feldman said the TPP would benefit Thailand’s booming medical tourism industry, in which patients would have access to the latest developed drugs. However, local NGOs said Thai patients would have to pay much higher prices for patented medicines.
The bilateral relationship between Thailand and the US has lasted for over 180 years and the cumulative investment of American firms in Thailand accounts for about a quarter of $204 billion (7 trillion baht) of the total cumulative American investment of 2013 in Southeast Asia, Thai and American officials said.
Gen Prayut said he used the meeting to explain to the visiting Americans, to try and understand his government's efforts to bring political stability to the country and strengthen its competitiveness.
"They didn't dislike me. They assured us that they will continue to invest in Thailand. I've told them that we and the Americans have been friends for 180 years; therefore our friendship must continue. If they dislike me, just ignore me," he said.
Americans were the fourth-largest investors in Thailand in 2014 after Japan, the European Union and Taiwan with combined investment of 50.16 billion baht versus only 9.4 billion baht a year earlier. The US was Thailand's third-largest trading partner in 2014 with a combined trade value of $38.47 billion.
The Board of Investment says the value of investment applications of US investors in Thailand rose to 50.15 billion baht last year from 6.2 billion in 2010. The application value of US investors in the first half of this year was 23.11 billion baht.
Despite the difficult relationship between Washington and the military-appointed government, Mr Feldman said American firms "did not take positions on politics" and had no problem with the Prayut government, which has brought political stability to the country.
"Over a year ago it was challenging in Bangkok in terms of protests, sporadic violence. [But] there are no protests blocking the business district, no violence now," Mr Feldman said.
"Business likes stability and certainty. We are comfortable with the stability we have now. We continue to encourage Thailand to move down the path of democracy and towards elections."