Japan-Thai FTA to phase out tariffs

by Reiji Yoshida

Accelerating a global race to strengthen ties with Asia’s economic powers, Tokyo and Bangkok inked a free-trade agreement Tuesday that will abolish tariffs on more than 90 percent of bilateral trade over 10 years.

Japan’s exports to Thailand totaled 2.66 trillion yen last year, making Thailand Japan’s sixth-largest export market by value. The FTA will make 97 percent of those exports tariff-free, most notably steel and auto parts.

Thailand’s exports to Japan totaled 1.96 trillion yen, 92 percent of which is expected to be tariff-free.

Tariffs will be eliminated or slashed on some fruit, chicken, prawns and fish products, areas of particular interest to the Thais. Japan was successful in having its highly protected rice market excluded from the pact.

The government will soon submit the pact to the Diet. If all goes well, it will go into effect in fall at the earliest, Foreign Ministry officials said.

The Thai legislature has already approved the pact, which will eliminate or reduce all of the target tariffs within 10 years of its implementation.

Japan and Thailand signed an FTA framework in September 2005, but negotiations had been suspended after a bloodless coup last September.

Prime Minister Shinzo Abe and his counterpart, retired Gen. Surayud Chulanont, who was installed by the Thai military, signed the Japan-Thailand Economic Partnership Agreement at the prime minister’s office in Tokyo.

The FTA “will establish the foundations for a new era of intensified and sustainable friendship and partnership between our two people,” Chulanont told reporters before signing the deal.

Under the deal, the two countries will eliminate tariffs on almost all mining and manufacturing products.

They also agreed to loosen some immigration controls. Japan will lessen the conditions for working visas for Thai cooks, and instructors of Thai dance, music and boxing.

Thailand will lower the minimum monthly salary for Japanese workers to 50,000 baht (182,000 yen) from 60,000 baht (218,000 yen).

Japan has been pushing free-trade agreements with a number of Asian countries. Thailand is Japan’s sixth FTA partner.