Thais speak of three seasons — cool, hot and rainy — and over the past two weeks, the rains have begun again.
Trade Secrets is writing to you from Bangkok, where recently returned rainstorms have taken the edge off the heat, cleared the air and turned Lumpini Park, the central business district’s garden spot, a lush green.
Thailand appears to have put the first wave of Covid-19 behind it, and parliament is back in session. Amid the sense of fresh beginnings, government officials’ thoughts are turning to trade treaties, which is the subject of our main piece today. Our chart of the day looks at falling US imports of clothing from Asia, while Tall Tales of Trade examines the UK’s plans to secure a trade deal with Japan.
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‘I don’t want CPTPP’
Trade talks are all the rage in Thailand right now. The government of Prime Minister Prayuth Chan-ocha this week approved the establishment of a committee to discuss joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). There is also chatter in Bangkok diplomatic circles of Thailand reviving talks on a free trade agreement (FTA) with the EU, which Brussels suspended after the 2014 military coup.
Thai businesses support the fast-tracking of fresh trade talks amid the economic disruption caused by the pandemic. “We see we are losing a lot of competitiveness on exports,” Ghanyapad Tantipipatpong, chairwoman of the Thai National Shippers’ Council, told Trade Secrets. “And if we don’t try to expand the market with FTAs, in the long term we stand to lose more than we gain.”
In Vietnam, which joined CPTPP last year, the parliament this week ratified an FTA with the EU. South-east Asia’s star economy has over the past decade negotiated a web of FTAs that have helped make the country a global manufacturing hub.
After Thailand held a multi-party election (however flawed) last year, it is hoping the EU won’t shun the kingdom on human rights grounds, especially after inking the FTA with Vietnam, which jails outspoken bloggers and democracy activists and applies the death penalty for some crimes.
But a successful conclusion of trade talks in Thailand is not guaranteed. If social media posts are any indication, Thais themselves are in no mood for a new FTA. #NoCPTPP has been a top trending hashtag on Twitter in recent days, as has #ไม่เอาCPTPP (I don’t want CPTPP).
Thais say the outpouring of emotion is in part a reflection of broader discontent with the Prayuth government, especially with urban youth who use social media sites, as well as the bad taste left by some of Thailand’s past FTAs.
Plastic waste at a recycling centre in Bangkok. Some Thais oppose the CPTPP on environmental grounds © DIEGO AZUBEL/EPA-EFE/Shutterstock
“If you look at Twitter trends in Thailand right now, this issue is very popular,” said Witoon Lianchamroon, director of Biothai, one of an array of non-government organisations (NGOs) that oppose CPTPP. “It links to the unpopularity of the government as well.” While some of their posts air anti-FTA arguments made by environmental and other pressure groups, most of the outcry has less to do with free trade and open borders than free-floating discontent in Thailand, which is rising as the country’s semi-lockdown ends.
In the early 2000s, when populist prime minister Thaksin Shinawatra was in power, Thailand signed a rash of FTAs with countries ranging from India and China to Australia and New Zealand.
But Thais who followed trade talks at the time say that governments oversold FTAs to the public, without allowing for robust public debates.
Distrust of free trade grew, and NGOs that oppose trade liberalisation sprung up. Their opposition is now resurfacing with a vengeance. Led by the group FTA Watch, NGOs have warned that the CPTPP would weaken the hand of Thai producers and regulators in sectors ranging from pharmaceuticals to farming and hazardous waste. The country has not concluded a major FTA since the Japan-Thailand Economic Partnership of 2007. The NGOs have had more than a decade to formulate their cases against FTAs, and they seem to be getting heard (or at least retweeted) more than the op-eds from big business some publications are starting to publish.
Some opposition politicians have also been arguing against CPTPP, and thus far winning the day against an unpopular government that hasn’t yet properly articulated the case for renewed trade talks. Auramon Supthaweethum, director-general of Thailand’s Department of Trade Negotiations, declined an interview request.
Pavida Pananond, associate professor at Bangkok’s Thammasat Business School, argues that Thailand needs agreements such as the CPTPP not only for trade liberalisation, but to force much-needed domestic reforms in areas such as intellectual property, competition law and government procurement.
However, she said, the government needed to communicate clearly on the pros and cons “so we can negotiate properly”.
“Pushing things through by only accentuating the positive is not the right way to communicate,” she added. “But for NGOs to hold the country hostage over specific issues is also not the way forward.”
With the battle lines drawn between government technocrats and a disgruntled public, the likelihood of a quick or even a successful negotiation looks slim.
Charted waters
Clothing exporters in Bangladesh have been having a tough time due to cancelled orders from retailers in the US and Europe. Other Asian exporters are suffering, too, with US imports falling further in May across India, China, Sri Lanka and Vietnam as well as Bangladesh.
Tall tales of trade
Liz Truss, the UK’s international trade secretary. A bilateral deal with Japan isn’t as simple as she makes it sound © AFP via Getty Images
The latest in the series “Global Britain conquers the world trading system” (modern Global Britain, that is, we’re not on Edward Colston’s case right now) is the UK launching talks for a bilateral deal with Japan, writes Alan Beattie. Indefatigable international trade secretary Liz Truss wheeled out the standard rhetoric: “Now is the time to make the pivot to Asia-Pacific and provide British firms with the market access and competitive edge they need to thrive.”
To be fair, Truss’s statement did mention the existing bilateral between the EU and Japan, which is basically what the UK is scrambling to replicate, before saying that the UK would build on it with stronger provisions on data. But as Sam Lowe, of the Centre for European Reform, points out, a copy-paste-plus on EU-Japan isn’t quite as simple on that. Why? Our old friend agriculture. Japan has already granted a lot of market access through the CPTPP and EU deals, and it’s not going to give up more without a fight. Truss isn’t necessarily wrong, but it’s really not as simple as she makes it sound.
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Tokyo talk
The best trade stories from the Nikkei Asian Review
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