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Tuesday April 3, 5:09 PM
Japan approves controversial Thai trade pactJapan on Tuesday approved a controversial free-trade deal with Thailand that the kingdom hopes will hearten uneasy foreign investors amid lingering concern since last year's coup. The deal slashing more than 90 percent of tariffs had been in doubt for months due to Japan's uneasiness over the military takeover and street protests by activists in Bangkok.
Surayud's government approved the deal last week, hoping that the pact with Thailand's largest investor will ease worries in the business community about protectionist policies since the military takeover. Hours before the signing, demonstrators burned a mock free-trade agreement in front of the Japanese embassy in Bangkok, holding a banner that said, "Free Trade Agreement with Japan is horrible. It only benefits Japan." The agreement was negotiated by Thailand's elected prime minister Thaksin Shinawatra, whom the army ousted in September, accusing him of corruption. Free-trade negotiations between Thailand and the United States have stalled since the coup and Surayud has yet to visit any Western countries as premier. But Japan has historic political and economic ties with Thailand, with many Japanese firms using Bangkok as a regional hub. Surayud said relations with Japan were "of the greatest strategic importance" for Thailand but acknowledged that Tokyo still had concern about the coup. "We are determined to maintain the timeline stipulated in the interim constitution and hold free and fair elections before the end of this year," Surayud said. He insisted he was not a military ruler and that he was in charge. Last week he publicly rejected a call by the coup leader, General Sonthi Boonyaratglin, to extend emergency rule in Bangkok to curb swelling anti-junta protests. "I'm the one who calls the shots. That I can say. If not, I'm not going to be in this position," Surayud said. Japan said it was not ignoring concerns about democracy in Thailand. Abe "is very likely to call on Prime Minister Surayud to assure an early return to a normal democracy in their summit talks," a foreign ministry official told AFP on condition of anonymity. Under the agreement, about 97 percent of Japanese exports to Thailand and 92 percent of Thai exports to Japan will be tariff-free within 10 years. Tokyo will scrap tariffs on Thai shrimp and tropical fruit such as mangoes and durian, although it will keep protecting Japan's politically powerful rice farmers. Thailand will cut tariffs on automobiles with engines of 3000 cc or larger to 60 percent from 80 percent over four years and eventually scrap all tariffs on steel imports. Thailand is trying to transform itself into the "Detroit of the East" and has become a major construction hub for Japanese automakers. But activists -- some of whom were part of protests against Thaksin before his ouster -- say the free-trade deal will turn Thailand into a dumping ground for Japan's toxic waste. "Concerns by anti-globalisation activists are not legitimate as both Japan and Thailand are signature countries of the Basel Convention which controls movement of hazardous wastes," the Japanese foreign ministry official said. Japan, the world's second largest economy, has been seeking a growing number of bilateral free-trade deals amid the breakdown in global liberalisation talks. It has already inked trade pacts with Thailand's neighbour Malaysia as well as Singapore and the Philippines.
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