How the government navigates the contest between the United States and
China in the economic sphere will be a litmus test of Thailand's diplomatic and
political skills.
Thailand has shown
"interest" in joining the Trans-Pacific Partnership (TPP). It is also
a member of the new Regional Comprehensive Economic Partnership (RCEP).
The US is the engine behind the
TPP, which doesn't include China. The RCEP has China as a major founding
member, and the US isn't part of that new regional scheme.
Will the two regional "free
trade" ideas collide? Or will they complement each other?
What is obvious at this stage is
that there will be at least a certain degree of competition between Asean's
RCEP - which represents an agreement to commence negotiations early next year,
according to the agreement reached at the East Asia Summit (EAS) in Phnom Penh
on November 20 - and the TPP.
Thailand at this point appears to
be closer to the RCEP than the TPP but Washington has put pressure on Thailand
to at least "show interest" in embarking on discussions to join.
Premier Yingluck Shinawatra did exactly that when US President Barack Obama
visited Bangkok recently.
The two groupings may share some
basic objectives - trade liberalisation and economic integration - but critics
here point to the fact that the TPP isn't confined to economic cooperation. In
fact, it's the political implications of being part of this "higher
level" of integration that have cast suspicion on the "hidden
agenda" of the TPP move, which is publicly associated with "the
objective of shaping a high-standard, broad-based regional pact".
Opponents in Thailand are
concerned that if Thailand shows haste in joining the TPP, the country could
plunge into a bottomless abyss. They have pointed to the dangerous
"trap" of being drawn into areas of intellectual property rights and
patent registration that will adversely affect Thailand.
Advocates here, however, insist
that Thailand can't afford to "miss the train" and should make every
effort to become part of regional economic integration, which will become an
inevitable trend for the future.
Premier Yingluck, trying to calm
the vocal opposition over this issue, has insisted that the process of joining
the TPP will be a long one. She promised that the private sector will be
consulted before the government makes a decision. Besides, the government will
have to seek parliamentary approval before any concrete action.
The TPP is the result of an
agreement reached by New Zealand, Chile, Brunei Darussalam and Singapore in
2005; the US, Canada, Australia, Peru, Vietnam, Mexico and Malaysia have since
joined. Japan and South Korea have also come on board. Officially, the TPP's
aim is to set up a regional free trade area (FTA) to further liberalise trade
in the Asia-Pacific region.
Washington has more or less
turned itself into the champion of the TPP, which will cover goods and
services, investment, intellectual property rights, environmental protection,
labour, financial services, technical barriers and other regulatory issues.
A senior Washington-based Thai
diplomat told me: "The United States has to push the TPP hard because
Washington, unlike China, doesn't have any real FTA arrangements with Asian
countries so far."
So far, the RCEP hasn't been
challenged by Thai academics or business leaders. Asean has FTA pacts with such
non-Asean countries as China, Japan, South Korea, India, Australia and New
Zealand.
The RCEP is, after all, an Asean
initiative aimed at gathering all the FTA arrangements into an integrated
regional economic pact. Hopefully, it will allow deeper economic cooperation
than the existing FTA agreements.
The RCEP is seen as a strictly
economic move, and with Thailand being an active member from the beginning, the
concept has drawn little suspicion, except the lurking question as to how it
can benefit the country in real terms.
In broad terms, some observers
have noted that the TPP and RCEP may represent a new point of conflict between
the US and China, each trying to shape economic cooperation groupings in
Southeast and East Asia to promote their respective economic interests, which
in turn inevitably carry political and security implications.
Some academics within Asean have
already expressed concern that competition between the two agreements may split
Asean members. Singapore, Malaysia and Vietnam appear to have jumped onto the
TPP with both feet, while the other Asean members are more inclined towards
building up the RCEP as the main regional economic body.
Will this drive a wedge into
Asean's "centrality"? Asean has so far concentrated on initiatives
such as the EAS and Asean+3. Asean stands to lose clout as the region's driving
force if it fails to effectively navigate in the right direction, in the wake
of the new Washington-Beijing face-off.
Asean will have to decide how to
move the RCEP forward as the major economic integration concept, while linking
up with the TPP to pave the way for a wider, more broad-based cooperation
scheme. To achieve that highly complicated and challenging goal, however, Asean
members will first have to get their act together.
Suthichai Yoon
Business & Investment Opportunities
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