After Brexit Thailand and UK in free trade talks

[Gaybutton]

Tariff-free deal with UK eyed after Brexit vote

by Phusadee Arunmas

18 Jul 2016

Thailand is revving up free trade talks with Britain after the latter's decision to leave the European Union makes it easier for it to pursue international trade talks.

Deputy Commerce Minister Suvit Maesincee, who led Thai trade delegations to Britain on July 11-14 , said Thailand and Britain have agreed in principle to step up talks to stimulate mutual trade and investment.

The countries also agreed to set up the Thai-UK Business Leadership Council led by giant firms of the two countries including Thailand's PTT Plc and Britain's Rolls-Royce.

Britain is now ranked as Thailand's 19th-largest trading partner in the world and Thailand's second-largest trading partner in Europe.

Thailand's trade value with Britain was registered at US$6.4 billion last year, down 6.1% from $6.8 billion in 2014.

For the first five months of this year, two-way trade between Thailand and Britain totalled $2.24 billion, with exports from Thailand accounting for $1.49 billion.

Key exports include processed chicken, car and car parts, electrical circuits, motorcycles and parts, gems and jewellery, machinery and parts, air conditioners and parts, canned and processed seafood, plastic products and garments.

Mr Suvit said he used his visit to Britain to encourage Rolls-Royce to move its production base to Thailand, where the government is offering myriad incentives to promote high-technology businesses including aviation.

Approved by the cabinet last November, logistics and aviation are among the 10 targeted industries being promoted as clusters by the government.

Others are next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.

Also in November, the cabinet approved in principle a Finance Ministry proposal to set up a 10-billion-baht fund to support investment in the 10 clusters.

The fund will help investors gain easier access to financial support to accelerate investment in the cluster project.

With a budget of 12 billion baht for the 2016 fiscal year, the Science and Technology Ministry has been tasked with working more closely with economic ministries to support private firms and strengthen the competitiveness of both large companies and small and medium-sized enterprises.

Investments in the 10 industry clusters will be entitled to full corporate income tax exemption for eight years and a 50% reduction for five years thereafter, with tariff waivers for imported machinery.

According to Mr Suvit, Thailand's trade talks will now focus more on strategic partnerships rather than only free trade agreements.

Trade talks should concentrate largely on mutually agreed areas such as trade, investment, tourism, infrastructure construction, innovations and technology, leaving aside sensitive issues such as the agricultural sector.

Mr Suvit said the government would focus trade talks on three target groups: CLMV (Cambodia, Laos, Myanmar and Vietnam); China, Japan, Singapore, South Korea and India, which will become vital in driving Asia's economy; and Iran and Russia, which are classified as high-potential partners for trade and investment.

Thailand also aims to accelerate trade talks under the framework of the Regional Comprehensive Economic Partnership (RCEP), he said.

Negotiations were formally launched in November 2012 at the Asean Summit in Cambodia with the aim of establishing deeper economic cooperation between the 10 Asean members and Australia, China, India, Japan, New Zealand and South Korea, focusing on trade in goods, services and investment.

The RCEP potentially includes more than 3 billion people or 45% of the world's population, and a combined GDP of about $21.3 trillion, accounting for about 40% of world trade. The pact is viewed as an alternative to the Trans-Pacific Partnership trade agreement, which includes the US but excludes China.

http://www.bangkokpost.com/business/new ... rexit-vote

[scottish-guy]

The UK is currently still in the EU, with no (2yr minimum) notice of withdrawal having yet been given.

The UK Prime Minister now says she will not invoke notice to quit until she has UK wide agreement. It's very difficult to see how that agreement can emerge, given that 62% in Scotland voted to remain in the EU.

Just as the UK PM says "Brexit means Brexit" so the Scottish First Minister is saying "Remain means Remain" - so a very big circle has to be squared to reach any agreement.

Point is - as a member of the EU, the UK is forbidden from entering into "separate" trade deals with other countries.

So perhaps some low level talks may take place - but nothing along the lines of a UK/Thailand trade deal can happen until the UK formally leaves the EU, which will not be anytime soon.

[Alex]

Spot on, scottish-guy, and that's also what John Kerry said when meeting Boris Johnson: No US-UK FTA until after the Brexit has been completed. Anything else is just wishful thinking.

[Daniel]

The UK newspapers tell positive stories about approaches from countries keen to secure future trade deals. The Brexit referendum may have been the kick up the backside needed by many UK businesses to set their sights higher than just the EU market.

Prime Minister Theresa May wants Scotland to be part of the UK. She genuinely wants Scotland, Wales and Northern Ireland to agree to whatever she does. Although 1.7 million people from Scotland voted to remain in the EU, the UK has a mandate from 17.5 million UK voters to leave. Scotland might block the Brexit in the Scottish Parliament, but that would be overridden by Westminster. This might trigger a second referendum for Scottish Independence. Only an Independent Scotland could apply to be part of the EU.

As someone who doesn’t want to leave the EU, I have huge sympathy for Northern Ireland and Scotland.