Tanit Sorat, a
vice-chairman of the Federation of Thai Industries, said free trade in Asean
and logistics among countries in the Greater Mekong Subregion (GMS) will pose
challenges for Thai firms.
Trade
will be upgraded from border-to-border to city-to-city, and local activity will
be scaled down and replaced with international activity.
Rising
production costs have already forced relocations to cheaper countries, but some
Thai investors are still reluctant to go abroad. (See table.)
Many
firms will see their production base in Thailand endangered by competitive
global trade, so expansion is a must to ease the impact of the rising daily
minimum wage and external risks.
Mr
Tanit said Thai private firms in neighbouring countries can also enjoy tariff
privileges under the Generalised System of Preferences.
He
suggested six sectors consider relocation: industries that use local content
material; the textile industry, which is labour-intensive; spare parts;
electrical and electronic equipment, which benefits from the value chain;
household furniture made from natural materials; and the agricultural
processing industry.
But
the government must give priority to linking the GMS countries.
Mr
Tanit said local authorities may not have the capability to handle more trade
volume. Thus, skill development is needed among officials as well.
He
suggested the government fix missing logistics links, standardise regulations
for goods and transport, and tackle illegal immigrant and environmental
problems.
In
related news, the cabinet yesterday approved the establishment of a one-stop
service centre at the Ban Phak Kat checkpoint in Chanthaburi province to
accommodate increased cross-border trade and visitor traffic ahead of the Asean
Economic Community in 2015.
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