Cablegate: Thailand Takes a Pass On Asean-Korea Fta

This record is a partial extract of the original cable. The full text of the original cable is not available.

150947Z Dec 05

UNCLAS BANGKOK 007645

SIPDIS

SENSITIVE

DEPARTMENT PASS USTR
COMMERCE FOR ITA/MAC/AP/OKSA/JBENDER AND JKELLY

E.O. 12958: N/A
TAGS: ETRD TH
SUBJECT: THAILAND TAKES A PASS ON ASEAN-KOREA FTA

1. (U) South Korea signed a Free Trade Agreement (FTA) with
ASEAN in Kuala Lumpur on December 13, with the notable
absence of Thailand, which declined to sign. Thai leaders
did sign a framework agreement for the FTA, but balked at the
deal on trade in goods after South Korea insisted on
exclusion of rice from the tariff reduction list. Thailand
is the world's largest exporter of rice and exported 34,000
metric tons of rice to South Korea in 2004, about 16 percent
of rice allowed to be imported under Korea's strict import
quotas, but only half a percent of overall Korean rice
consumption.

2. (SBU) Mr. Phasit Poomchusri, senior expert in the Thai
Department of Trade Negotiations (DTN), said discussions with
South Korea would continue in January and hoped to have
conclusion by the end of March for an agreement to be signed
at an ASEAN Economic Ministers retreat in Laos in April. DTN
did not expect South Korea to open its rice market further,
but planned to negotiate an elimination of tariffs on a range
of other agricultural goods in exchange for the rice
exclusion. Phasit said Vietnam, the world's second largest
rice exporter, had also been concerned about the exclusion of
rice, but successfully made a side deal with the Koreans
before the deal was signed.

3. (SBU) Although disappointed at the exclusion of rice from
the agreement, Phasit said RTG goals had never been high for
trade in goods. Korean tariffs on agricultural goods were
already low and the value of Thai agricultural exports to
Korea was not substantial. The RTG had higher hopes for an
agreement on services and investment to be negotiated between
ASEAN and South Korea in 2006, looking forward to investment
cooperation in auto and electronics manufacturing.
BOYCE

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