‘Zero chance’ of Thailand FTA under junta, Commission official says

Thai soldier confronts protestors. Bangkok, May 2010. [null0/Flickr]

EXCLUSIVE / The suspended Free Trade Agreement with Thailand will “never be ratified” whilst the country is under a military dictatorship, a top aide to EU Trade Commissioner Cecilia Malmstrom admitted on Friday (20 November).

Citing the spectacle of millions demonstrating against TTIP and the power of social media, Deputy Head of Cabinet at DG Trade, Miguel Ceballos Baron told an audience of Asian investors that any chance of a deal whilst the country was run by generals was “probably zero”.

And he compared Bangkok’s situation pointedly with its neighbour Myanmar, where the road towards democracy has seen a lifting of sanctions and a new investment plan.

Baron told EURACTIV that Malmstrom’s new trade policy, ‘trade for all’, meant an emphasis on human rights, corruption and transparency that EU citizens would simply not accept from a military junta.

Brussels suspended trade negotiations with Bangkok – which were already well-developed – after the military seized power in a coup in May 2014.

Baron said that even if an FTA with Thailand were now negotiated, it would never be ratified by the European Parliament.

>>Read: MEPs condemn Thai junta

Before an audience of around 100 guests at the European Policy Centre’s “Strengthening ties with Asia?” seminar, Baron explained that the ethical dimension to free trade deals was a response to public concern and a “request from the European citizens to have more responsible trade”.

“In previous years, the debate about trade was limited to business community, particularly,” he said. “Now, mostly triggered by TTIP, but since happening in the US with TPP, this debate has become of the public domain.”

“It’s on the streets, it’s on the social media, newspapers, parliament, national parliaments, so, we are listening,” Baron stated.

“Consumers want to know about the safety of the products they are buying, citizens want to know about the conditions in which the products they are importing, are made: the working conditions in Bangladesh or in Mexico. There is a need to know.

“Combined to this increasing interest on trade, the European Commission has decided to become more transparent, to explain what we are doing, and the consequences for our citizens, our consumers, business. And we do it first, because we believe in it. We believe in an open, democratic system, that is transparent, and explains to all stakeholders what we do. First, we believe in that.

“And if you want a second explanation, maybe more pragmatic, but if we don’t do it, these agreements may be negotiated, but they will never be ratified [by the Parliament].”

Baron added: “I go back to my second point – what do you think would be the chance of having a FTA with Thailand today ratified in the parliament? Probably zero. So, we are aware of that.”

The trade official called it a “pragmatic approach, because we believe in Asian democracy, and we believe in the role that trade can play.”

Earlier, Baron had told his audience of investors that “unfortunately, we had advance a lot in talks with Thailand” before the coup by Prime Minister General Prayuth Chan-ocha in May last year.

And compared the freezing of talks with Thailand with its northern neighbour Myanmar, where elections earlier this month saw Aung San Suu Kyi’s National League for Democracy win a majority of the seats not reserved for the military, sparking what the EU hopes will be a peaceful transition to civilian rule.

Baron stated: “… the other positive example of a role that trade policy applied to our foreign policy, because trade is now a full part of the EU foreign policy is Myanmar.

“As soon as the EU decided on this foreign policy to lift the sanctions, because Myanmar was moving to a direction of democracy, that is now being consolidated after the election in that country … we believe that trade could be a very strong tool to involve economic growth and development,” adding that he hoped Myanmar’s citizens would soon see “the benefit of democracy, of transition to a new regime, new system”.

“So we were there to support the new foreign policy approach to Myanmar, ” Baron concluded. “First, reinstating Myanmar into the ‘general system of preferences’ and knowing that this particular trade system will benefit immediately farmers. We’ve seen a very important increase of exports of rice from Myanmar so this is directly benefitting the farmers in that country.”

He also pointed to a surge in textile exports and investment insurance for investors “because of the poor institutional devlopment of Myanmar”.

>>Read: Commission unwillling to let illegal Thai fishing off the hook

Thailand’s fishing fleet is currently under a ‘yellow card’ on its imports to the EU, after repeated violations of the “Illegal, Unlicenced and Unreported” (IUU) protocols on labour abuses and sustainable supplies.

A decision on whether to rescind that, or upgrade it to a ‘red card’, which would ban all imports of Thailand’s crucial tuna industry, is expected by the end of the year.

Whilst the EU has a long-term plan to seal a FTA with the entire 10-member Association of South East Asian Nations (ASEAN), it has more recently focussed on bilateral deals.

FTAs have already been signed with Singapore, the most open and dynamic economy in the region, and Vietnam, which is seen as one of the most promising emerging and developing powers.

On 16 November, the European Council gave the Commission the go-ahead to begin trade negotiations with the Philppines.

The Thai mission to the EU told EURACTIV that “it was a pity our shared values were being overlooked”.

A spokesman said, “Various studies show that ASEAN is promising for EU interests. Free trade agreement is for mutual benefit, not a zero-sum game. It also requires lots of efforts, times, and resources in negotiation process that can not be done overnight. When our negotiation is suspended, not only Thailand will miss the opportunity, but also the European economy – the largest foreign investors and the 3rd largest trade partner of ASEAN.

“[We] realize that DG Trade has encountered with great pressure from the European Parliament in many issues. However, [we] would not jump into the conclusion that there was “probably zero” chance of an EU-Thailand Free Trade agreement under the current regime, due to the EU’s commitment to human rights and transparency in new trade deals.

“This government is making lots of progress; political reform, human rights and transparency are included.”

The spokesman added that elections are planned for between March-June 2017, after a so-called 6-4-6-4 formula, after the number of months for respectively drafting a new charter, followed by a referendum, followed by law-drafting, followed by an election.

Thailand’s Ministry of Commerce is now conducting an in-depth study of the Trans-Pacific Partnership before deciding whether to join, the spokesman said.

Last summer, after coming to power in the bloodless coup that overthrew elected Prime Minister Yingluck Shinawatra, Prayuth told European investors that “we are not dictators that just order whatever”.

According to Reuters, at a meeting of the Thai-European Business Association (TEBA), he added: “We listen to many civilian advisors. I ask you and the European Union to give us some time to deal with our problems.”

  • November/December 2015: A decision on whether to rescind Thailand's yellow card for IUU fishing, or upgrade it to a red card, which would see a ban on imports from the key Thai tuna sector.

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