Thailand sends written response to US over trade-deficit concerns
May 12, 2017 01:00 By THE NATION
THE COMMERCE Ministry has sent a response to the United States defending Thailand’s trade surplus, saying it accounts for only 1.5 per cent of America’s overall trade deficit and is based on differences in economic structure, not from discrimination or unfair policies.
Pimchanok Vonkorpon, spokeswoman for the ministry, said the Cabinet acknowledged Thailand’s draft clarification letter at its meeting last Tuesday.
The US Federal Register’s Executive Order 13786 had requested comments that would be gathered for an analytical report on the US trade deficits against 13 economies. They are in descending order Canada, China, the European Union, India, Indonesia, Japan, South Korea, Malaysia, Mexico, Switzerland, Taiwan, Thailand and Vietnam.
The deadline for the written responses had been next Wednesday, but the Commerce and Foreign ministries revised the draft letter according to points made by the Cabinet and the Commerce Ministry has already sent the final letter to the US agency ahead of schedule.
The Commerce Ministry had been assigned by Deputy Prime Minister Somkid Jatusripitak to coordinate with both private and public agencies to collect US-Thailand trade and economic information for the clarification letter.
The letter attempts to explain the facts for a good bilateral relationship along several dimensions including social, political and stability, while stressing the long US-Thai relationship of 184 years.
A US-Thai treaty of amity serves as the main pillar for the relationship with discussion stages under the Trade and Investment Framework Agreement (Tifa) and the World Trade Organisation (WTO) to solve trade obstacles.
According to the statement, US exports to Thailand have not expanded at a high level as the US does not have a free-trade agreement with Thailand, while US direct investment in Thailand has slowed down.
The Thai products that the US imports help develop the American economy, the ministry argues. They include intermediate products |for value to be added by US advanced technology and agricultural materials.
Thailand has also invested more in the US, generating jobs for tens of thousands of Americans, while many US firms invest and operate services in Thailand.
Thailand is the regional export base for several US firms and links up with US value chains in the Asia-Pacific region.
Thai exports to the US reflect structural differences and mutual dependence between the Thai and US economies, the ministry said.
Pimchanok said that besides factual figures on both countries’ trade and investment, Thailand explained that its trade policy adhered to the principles of a market economy, which is in line with the WTO’s tariff and non-tariff measures.
Under Tifa, the two countries have held discussions particularly on the protection of intellectual property, while Thailand provides updated information and accelerates measures regarding licences, trademarks and the backlog of patent applications.
Thailand has also cooperated with the US Trade Representative office to devise an IP working plan focusing on protection and legal enforcement.
Thailand also presented a progress report on worker protection and labour rights.
Thailand reiterated that none of its policies interferes with exchange rates to give the country an unfair export capability. The Bank of Thailand focuses on exchange-rate stability.
In the letter, Thailand outlined its internal reforms, such as amending laws, including for competition and state procurement, for higher transparency, increasing stakeholders’ participation and supporting more facilitation for business operations.
The “Thailand 4.0” and Eastern Economic Corridor visions will also help deepen the Thai-US trade and investment relationship, it said.
Pimchanok said the clarification letter presented a good opportunity to point out the good, long Thai-US mutual relationship.
After a telephone discussion between Prime Minister Prayut Chan-o-cha and US President Donald Trump, the two leaders are expected to meet and discuss issues in the future, she added.