Free trade will open huge new market
ACCESS POINT AT THE HEART OF ASEAN, THAILAND CAN SERVE AS A GATEWAY TO BUSINESS IN SOUTHEAST ASIA

A STRONG energy sector is among the advantages that Thailand offers potential foreign investors

PRESIDENT George W. Bush is scheduled to be among the heads of state, ministers, and business leaders from more than 20 countries who will gather for the Asia Pacific Economic Cooperation (APEC) summit in the Thai capital, Bangkok, in October.

Thailand’s chairmanship of APEC has turned the spotlight on the country this year, highlighting its potential as a manufacturing and regional hub at the heart of the Association of Southeast Asian Nations (ASEAN).

American companies are already among the largest investors in Thailand. U.S. investment has increased by 300 percent since 1990 and totals an estimated $18 billion—supporting nearly a quarter of a million Thai jobs.
“As a member of ASEAN, Thailand can serve as a gateway for American business to the huge Southeast Asian market,” says Prime Minister Thaksin Shinawatra.

Looking ahead to the longer term, Dr. Thaksin adds that with the completion of the Free Trade Area of the Americas (FTAA) and the establishment of the ASEAN Free Trade Area (AFTA), “the potential for trade investment, growth, and development for both Thailand and the United States will be immeasurable.”
Leading sectors for U.S. investment in Thailand include petroleum, chemical, finance, consumer products, and automobiles. American firms have invested heavily in the Thai automobile industry, with most of the global car manufacturers, including Ford and GM, present.

“If the ASEAN trade pact is fully implemented, Thai auto assemblers would have access to a potential market of 511 million customers at tariff rates lower than those enjoyed by non-ASEAN countries like Korea,” Dr. Thaksin points out.

Other target industries that the Thai government is especially interested in promoting for investment include ICT, including electronics; agro-industry; fashion, including garments, jewelry, and leather; and high value-added services.

“Many big corporations from the United States have their business here, and they are very happy with their performance,” says Somphong Wanapha, Secretary General of Thailand’s Board of Investment (BoI). “We would like to see more U.S. companies coming to explore the possibilities. We will do everything we can to facilitate the process.”

According to Mr. Somphong, the investment regime in Thailand is one of the most liberal in Asia. “Investors can do business here with almost no restrictions, and they can easily obtain access to the market.”
U.S. firms receive favorable treatment in Thailand under the Treaty of Amity and Economic Relations of 1966. Companies incorporated in the U.S., or in Thailand that are majority-owned by U.S. citizens, engage in business on the same basis as Thais.

Tax-based incentives for investors include tax holidays or tariff exemptions. Additional tax incentives are available to investors who locate in Special Investment Promotion Zones, producing for export, or engaging in industries identified as priority activities.

Mr. Somphong emphasizes that Thailand is a safe and stable destination for investment. “Thailand is unique in terms of its long-term stability, and is considered a peaceful country. We have full democracy here, so any political changes are made in a democratic way.”

The BoI has an office in New York, and plans to open a second one in San Francisco.

State enterprises scheduled for privatization this year include the Airports of Thailand, TOT Corporation (formerly Telephone Organization of Thailand), and the Communications Authority of Thailand. The government also plans new public offerings to reduce state ownership in Thai Airways and Krung Thai Bank.

Privatizations scheduled for 2004 include the Provincial Waterworks Authority, the Metropolitan Waterworks Authority, the Provincial Electricity Authority, the Metropolitan Electricity Authority, the Electricity Generating Authority of Thailand, and the Thailand Tobacco Monopoly.