Cablegate: Thailand Joins Asean-Korea Fta

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R 040945Z JAN 08
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 1318
RUEHUL/AMEMBASSY SEOUL 4133
RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/USDOC WASHINGTON DC

UNCLAS BANGKOK 000046

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STATE PASS USTR
USDOC FOR 4430/EAP/MAC/OKSA

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

SUBJECT: THAILAND JOINS ASEAN-KOREA FTA

1. (SBU) Thai trade officials announced January 3 that Thailand had
agreed to sign on to the ASEAN-Korea Free Trade Agreement (AKFTA)
after negotiating bilateral concessions from the Koreans. Thailand
was the last ASEAN member to agree to the trade deal. Thai
negotiators had refused to sign the agreement in late 2006 in
protest of Korea's insistence that rice be excluded from reductions
of tariffs or quotas. Ms. Sunanta Kangvalkulkij, senior expert at
the Department of Trade Negotiations, said Korea had conceded that
Thailand could delay reduction of tariffs for sensitive imports like
steel and leather from 2010-2012 to 2016-2017.

2. (SBU) Sunanta said Thai negotiators had been under pressure to
come to agreement from the private sector which had lost
competitiveness to other ASEAN members in their trade with Korea.
In addition, Thai officials realized that exclusion from the AKFTA
soon would have raised difficulties for their integration with the
ASEAN Economic Community. Thailand had earlier insisted it would
not sign on to the goods chapter of the AKFTA without further
reductions of rice quotas and barriers on other agricultural
products. Unable to make headway on agriculture, the Thais
nevertheless plan to revive discussions on rice and other
agricultural products with Korea when the FTA is reviewed in 2012.

3. (U) ASEAN and Korea are scheduled to meet next week in the
Philippines to continue negotiations on investment, the third and
final chapter in the FTA. An agreement on services was reached in
November 2007. The agreements on both goods and services remain
unofficial until parliamentary approval is obtained. Thailand
recently held national elections and a new parliament is not
expected to sit until late January.
JOHN

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