Rolf Schulze, the
German ambassador to Thailand, is upbeat about the prospects of the
Thailand-European Union Free Trade Agreement (FTA), whose first round of
negotiations started late last month in Brussels.
“Last year Thailand and Germany celebrated the 150th
anniversary of diplomatic relations. Within the European Union, Germany is by
far Thailand’s most important trading partner,” Schulze said.
“In 2012 bilateral trade amounted to $10 billion or
about Bt325 billion—an aggregate of the UK’s and France’s together,
representing an annual growth rate of 5 percent to 6 percent.
“Thailand had a slight surplus exporting automotive
parts, [information technology] parts, agricultural and aquatic products,
garments and footwear to Germany. Likewise, we exported automobiles, chemicals,
machinery, IT products, electronics, kitchen and other equipment.
“In terms of investment, German firms are here and
invest in factories for luxury cars such as Mercedes-Benz and BMW, chemicals
such as BASF and Bayer and a whole range of SMEs [small and medium-sized
enterprises]. Altogether, 600 German firms are in Thailand and foreign direct
investment amounted to around €1 billion in 2012.
“In the service sector such as tourism, last year,
700,000 Germans visited Thailand, a very attractive holiday destination, and
after having been here for two years I understand why it’s so. In addition,
30,000 Germans are permanent residents who have migrated to Thailand.
“Besides tourism, German firm DHL is a major player in
the logistic sector, employing 16,000 in Thailand, making it one of the
country’s biggest employers. We are also strong in law firms, insurance and
banks and other professional services such as Allianz, Deustche Bank and
Commerzbank.
“Last July Prime Minister Yingluck Shinawatra paid a
state visit to Germany and extended an invitation for German Chancellor Angela
Merkel to visit Thailand. In September this year, we will have a general
election in Germany and my impression is that there is a window of opportunity
to visit Thailand after the election.
“On the Thai-European Union FTA negotiations, the
first round of talks took place in Brussels late last month. Germany has been a
driving force behind the negotiations. We have convinced our European and Thai friends
of the benefits of this FTA.
“We hope the negotiations will be carried out on an
equal footing and a win-win situation for with added values for both parties.
We want a comprehensive agreement covering the whole varieties of bilateral
trade relations.
“Let’s be ambitious that the FTA talks will be
concluded in 2015 when the Asean Economic Community [AEC] will be effective. If
both parties work hard, we can achieve [an agreement], and we see Thailand as
an attractive market with a robust economy. German firms want to be part of
this success as well as in the greater framework of the AEC in 2015.
“The FTA will lower or abolish the import tariffs so
products [moving] into Thailand or out of Thailand will be cheaper. Thailand
already has FTAs with many countries, such as Japan, Korea and India. European
companies have found it difficult to compete with these countries in an equal
scenario, so an FTA with Thailand is important.”
Against the backdrop of slow movement in the World
Trade Organization in liberalising global trade, “we must be realistic that
FTAs must be in our toolbox in boosting our competitiveness.”
“Meanwhile, Thailand is no longer a developing country
but a higher-medium-income country about to join the ranks of developed
nations. Concerning the EU, we give preferential tariffs to developing
countries including Thailand; this will probably end in 2015 due to the
country’s changing status as reported by the World Bank.
“So it’s also in Thailand’s interest to negotiate the
FTA with the EU to maintain its competitiveness in exporting to the EU. When
bilateral trade is boosted by the FTA, more investment will follow, especially
in view of Thailand’s good infrastructure and highly developed landscape for
foreign direct investment. “The FTA will further boost European capital into
Thailand.
“On the euro-zone economic crisis, I can reassure Thai
business leaders that there is no need to worry and you can count on the euro.
There is no euro-zone crisis [as such] but a sovereign debt crisis of a few countries
of the 17-country euro zone.
“The sovereign debt crisis is that these few countries
have financial problems as they could no longer manage their deficits. It’s not
the single currency crisis. The euro remains a strong currency, while the
27-country European Union as a whole is not in a crisis either.”
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