Cablegate: Thailand Rejects Asean-Korea Fta

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RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #5406 2440923
ZNR UUUUU ZZH
R 010923Z SEP 06
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 1359
RUEHUL/AMEMBASSY SEOUL 2075
RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/USDOC WASHDC

UNCLAS BANGKOK 005406

SIPDIS

SENSITIVE

SIPDIS

STATE PASS USTR
USDOC FOR JKELLY

E.O. 12958:N/A
TAGS: ECON ETRD TH

SUBJECT: THAILAND REJECTS ASEAN-KOREA FTA

REFTEL: SEOUL 1981

1. (U) Thailand declined to join its nine ASEAN neighbors in the
signing of the ASEAN-Korea FTA in Kuala Lumpur last week. Mr. Sarig
Ubolbarn of the Department of Trade Negotiations explained that the
RTG had yet to reach agreement with Korea on opening Korea's market
to Thailand's rice exports. The RTG did not attempt to continue
negotiations in Kuala Lumpur and likely will not schedule further
bilateral discussions with Korea until after general elections are
held in Thailand later this year.

2. (SBU) Although rice exports presented the most serious and public
disagreement with Korea, other issues remain to be discussed.
Thailand is concerned about its ability to conform to the FTA's
model for tariff reduction and is still engaged in internal
discussions over which items should be placed in the "normal track"
or the "sensitive track" (see reftel). The RTG is struggling as
well with Korea's more stringent SPS regulations. Thai industry has
protested inclusion of products from North Korea's Kaesong special
economic zone, fearing an influx of cheap imports, and Sarig
suggested there would be further negotiations on the rate of tariff
reductions for Kaesong goods before Thailand would sign the final
agreement.

3. (SBU) Thailand's rice trade with Korea make up less than one
percent of its total exports to Korea (USD 2.4 billion in 2005) but
nevertheless holds a critical place in negotiations for Thailand.
Sarig conceded that other agricultural and seafood products were
more important exports to Korea at present that could benefit from
immediate tariff reductions, but felt the RTG had to try to crack
the market to benefit Thailand's many rice growers. Negotiations on
investment and services remain to be finalized and Thai trade
officials expect the rice issue may be resolved within those
negotiations.
BOYCE

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