Thailand: Initiation of FTA fund fast-tracked

The government is speeding up the process of establishing a revolving FTA fund to help sectors harmed by free trade agreements, including the Regional Comprehensive Economic Partnership (RCEP) trade pact, the world's biggest free trade deal, which sailed through parliamentary ratification last week.

Auramon Supthaweethum, director-general of the Trade Negotiations Department, said her department has been accelerating the finalisation of details on the establishment of the revolving FTA fund before its proposal to Commerce Minister Jurin Laksanawisit and later to the revolving fund management policy committee chaired by the finance minister.

Once the revolving fund management policy committee gives the nod to the fund establishment proposal, the department will prepare a draft revolving FTA fund act and bring the draft to public hearings. The draft act will be later forwarded to the cabinet and parliament for approval.

Mrs Auramon said the revolving FTA fund needs at least 1 billion baht, with funding possibly sourced from fees collected by the Commerce Ministry and other state units.

The fund's assistance may be offered in the form of a one-off payment in areas such as research and development, consultant and training sponsorship, marketing activities; and as a revolving fund in areas such as spending on construction and machinery.

Mrs Auramon said the department is also calling a joint meeting with related agencies to discuss the source of funds for the revolving FTA fund, noting the fund would also require additional income to ensure it had enough.

In a related development, Mrs Auramon said the pact would be enforced immediately once half the RCEP member states (at least six Asean member states and three non-Asean member states) ratify the agreement.

She expects the RCEP would likely come into force by Jan 1 of next year.

The RCEP is Thailand's 14th FTA and will be the largest free trade agreement in the world. It includes 15 members, including 10 Asean member states with five dialogue partners, namely China, Japan, South Korea, Australia and New Zealand.

It's also noteworthy that the RCEP is the first multilateral agreement to include China and the first FTA that links China and Japan, and Japan and South Korea.

The 15 participants in RCEP account for about 29% (US$25.8 trillion) of global GDP, 30% of the world's population (2.3 billion people) and 25% ($12.7 trillion) of global trade in goods and services, making it the world's largest FTA measured in GDP.

In 2020, Thailand exported $123 billion worth of exports (53.3% of the total) to RCEP members. Major export products were cars, accessories and parts, plastic resins, gems and jewellery, computer equipment and components, chemicals, and rubber products.

Source: Bangkok Post