International Trading Problem Between Thailand and USA by Big Poop-Pup Double Extra

INTERNATIONAL TRADING PROBLEM BETWEEN THAILAND AND USA
by
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.
ID 5331203008 ID 5331203009 ID 5331203013 ID 5331203031 ID 5331203041 ID 5331203058 ID 5331203060 ID 5331203061 ID 5331203062 ID 5331203085 ID 5331203120 ID 5331203138 ID 5331203147 ID 5331203148
Miss Kunlayada Miss Kittiporn Miss Jaruwan Miss Natthaporn Miss Thanaphorn Miss Panita Miss Porrawisa Miss Prareena Miss Pawanrat Mr. Panupon Mr. Sasawat Mr. Adisuan Miss Anchittha Miss Areerat
Reankeaw Worametrachanon Kanchai Juntima Durongkachayanuruk Chaiparinya Pattana Raksa Laonapaporn Rattanarangsan Gunpai Kanharattanachai Nanan Chairin
A term paper submitted in partial fulfillment of the course 1001204 Understanding Global Society MAE FAH LUANG UNIVERSITY Second semester, academic year of 2012 February, 2013
PREFACE This term paper is one part of Understanding Global Society course which relate with Business Administration major in Mae Fah Luang University. The topic is International Trading problem between Thailand and USA which is study about trade in the past to present. It always changes in many part as rapidly such as education, economy, social, and telecommunication. When we are study about the information at the part to the present, we can predict economy in the future. The economy is important to developing country because it shows the well-being of the population in the country and it can reflect to the government policy. In this term paper is include with the beginning of free trade, free trade agreement with USA, condition of agreement, problem, benefit, and affection of free trade. All of this will reflect to the relationship between two countries. There are great power country and developing country. Our group selects this topic because we are interested in economy between great power country and developing country. There have many interesting condition, advantagedisadvantage to each country. And it relates with the lesson that we have study. Finally, our group hopes that this term paper will give knowledge to the reader as much as we can. If there is any mistake in this term paper, we would like to apologize for our mistake. Thank you for your attention From manipulator
TABLE OF CONTENTS
PREFACE ................................................................................................................................ i 1. CHAPTER ONE INTRODUSTION ....................................................................................... 1 1.1 Statement of Problem .. .................................................................................... 1 1.2 Connect Activity ........................................................................................................ 2 1.3 Outline....................................................................................................................... 2 1.4 Gantt Chart................................................................................................................ 4 2. CHAPTER TWO INTERNATIONAL TRADING BETWEEN .................................................... 5 THAILAND AND USA 2.1 History of Thailand and USA trading ......................................................................... 5 2.1.1 Thailands Trading ...................................................................................... 5 2.1.1.1 Basic information of Thailand ......................................................... 5 2.1.1.2 Thailand International trade ........................................................ 6 2.1.1.3 U.S. Relations with Thailand ........................................................... 8 2.1.1.4 U.S. Assistance to Thailand ............................................................. 9 2.1.1.5 Bilateral Economic Relations ........................................................ 10 2.1.1.6 Thailands Membership in International Organization................. 10 2.1.1.7 Bilateral Representation ............................................................... 10 2.1.2 USAs Trading ........................................................................................... 11 2.1.2.1 Basic information of USA .............................................................. 11 2.1.2.2 Economic ....................................................................................... 11 2.1.2.3 Important policy in term of International Trade .......................... 12 2.1.2.4 Policies that affect the Southeast Asia ......................................... 12 2.1.2.5 International Trade policy toward the region .............................. 13 2.1.2.6 Policy to ASEAN ............................................................................. 13 2.2 The policy of trading between Thailand and USA................................................... 14 2.2.1 Trade Policy of Thailand............................................................................ 14 2.2.1.1 The Protective Trade Policy ...........................................................14 2.2.1.2 The Free Trade Policy .....................................................................14
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TABLE OF CONTENTS - CONTINUED
2. CHAPTER TWO INTERNATIONAL TRADING BETWEEN THAILAND AND USA (CONTINUED) 2.2.2 Trade Policy of USA .................................................................................. 15 2.2.2.1 USA Policy ..................................................................................... 15 2.2.2.1.1 Policy/measure of U.S. trade ............................................ 16 2.2.2.1.2 Trade Agreement .............................................................. 17 2.2.2.2 Agreement under WTO................................................................. 18 2.3 The important situations that occur in the trading ................................................ 20 between Thailand and USA 2.4 The Politic of Thailand and USA .............................................................................. 21 2.4.1 Politic of Thailand ..................................................................................... 21 2.4.1.1 Policy on Foreign Affairs and International ......................... 21 Economic 2011 (Thailand) 2.4.2 Politic of USA ............................................................................................. 23 2.4.3 Relation between Thailand and USA ........................................................ 23 2.4.3.1 Ally Thailand USA: Past and Present ................................. 23 2.4.3.1.1 Economy................................................................. 23 2.4.3.2 Ally Thailand USA: The Future .......................................... 24 2.4.3.2.1 Enhance relationships ............................................ 24 2.4.3.2.2 Focus on mutual benefit ........................................ 25 2.4.3.2.3 Revive negotiations FTA of .................................... 25 Thailand USA 2.4.3.2.4 Critic ....................................................................... 25 2.4.4 Critic (Strategic of Thailand to USA) ......................................................... 26 2.4.4.1 Impact on Thailand from TPP .............................................. 26 2.4.5 Conclusion: Politic of Thailand effect to USA ........................................... 26 2.5 FTA between Thailand and USA .............................................................................. 27 2.5.1 Free Trade barrier between Thailand and USA ........................................ 27 2.6 Non-tariff................................................................................................................. 29 2.6.1 Type of barrier for trading between Thailand and USA ........................... 30 2.7 Market Share of Thais export goods ...................................................................... 31 2.7.1 Export of consume product in 2007 - 2011 .............................................. 31
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2. CHAPTER TWO INTERNATIONAL TRADING BETWEEN THAILAND AND USA (CONTINUED) 2.8 Why does Thailand do Free Trade Agreement: FTA? ............................................. 32 What are the benefits? 2.8.1 The countries where do Free Trade Agreement with .............................. 33 Thailand 2.8.1.1 Negotiation Free Trade Agreement of Thailand.................. 33 and other countries 2.8.2 Opportunities of Thailand USA Free Trade Agreement ......................... 33 2.9 Watching Back to Thailand-USA Economic for five years, both ............................. 36 of opportunity and barrier 2.10 The effect of trading between Thailand and USA ................................................. 37 2.10.1 Exports between Thailand and USA........................................................ 37 2.10.2 U.S.-Thailand Trade Facts ....................................................................... 37 2.10.2.1 Exports ............................................................................... 37 2.10.3 Thailand GDP Growth Rate ..................................................................... 40 2.10.4 USA GDP Growth Rate ............................................................................ 41 2.10.5 Market Opportunities ............................................................................. 42 2.10.6 Market Challenges .................................................................................. 42 2.11 The Negotiation that occur between Thailand and USA include.......................... 43 with benefit and impact 2.11.1 The Negotiation between Thailand and USA.......................................... 43 2.11.2 The drawback of FTA between Thailand and USA .................................. 44 2.11.2.1 About trading products...................................................... 44 2.11.2.2 About investment .............................................................. 44 2.11.2.3 The opportunity of doing FTA between ............................ 44 Thailand and USA 2.11.3 Affection of trading between Thailand and USA .................................... 45 2.11.3.1 Affect to agriculture ........................................................... 45 2.11.3.2 Affect to automotive industry ........................................... 45 2.11.3.3 Affect to service of telecommunication ............................ 45 and electronic ecommerce 2.11.3.3.1 Telecommunication ............................................. 45 2.11.3.3.2 Electronic ecommerce ......................................... 46 2.11.3.4 Affect to financial management ........................................ 46 2.11.3.5 The protection of intellectual property ............................. 46 2.11.3.6 Conclusion.......................................................................... 46
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2. CHAPTER TWO INTERNATIONAL TRADING BETWEEN THAILAND AND USA (CONTINUED) 2.12 The relationship between WTO and Thailand ....................................................... 47 2.12.1 Introduction ............................................................................................ 47 2.12.2 Agriculture .............................................................................................. 48 2.12.3 Trade-Related Intellectual Property Right .............................................. 48 2.12.4 Food Safety ............................................................................................. 49 2.12.5 Investment and Competition .................................................................. 51 2.12.6 Textiles and Clothing............................................................................... 51 2.12.7 Conclusion ............................................................................................... 52 2.13 Reflection of trading between Thailand and USA................................................. 52 3. CHAPTER THREE CONCLUSION ..................................................................................... 53 REFERENCES ...................................................................................................................... 54
LIST OF TABLES Table Page
1. Table 2.1 Trade (expressed in billions of US$): Thailand .................................... 6 2. Table 2.2 Export of consume product in 2007.................................................. 31 3. Table 2.3 Export of consume product in 2008.................................................. 31 4. Table 2.4 Export of consume product in 2009.................................................. 31 5. Table 2.5 Export of consume product in 2010.................................................. 31 6. Table 2.6 Export of consume product in 2011.................................................. 31 7. Table 2.7 The Trading between Thailand USA ............................................... 36
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LIST OF FIGURES Figure Page
1. Figure 2.1 Location of Thailand........................................................................... 5 2. Figure 2.2 Balance of trade ................................................................................. 7 3. Figure 2.3 U.S. Thailand Relations.................................................................... 8 4. Figure 2.4 U.S. Assistance Worldwide ................................................................ 9 5. Figure 2.5 USA Map........................................................................................... 11 6. Figure 2.6 4th ASEAN-U.S. LEADERS MEETING ................................................. 14 7. Figure 2.7 Textile ............................................................................................... 27 8. Figure 2.8 Black tiger prawn ............................................................................. 28 9. Figure 2.9 Canned Pineapple ............................................................................ 28 10. Figure 2.10 The process in Shrimps factory in Thailand ................................ 30 11. Figure 2.11 Free Trade Agreement of Thailand .............................................. 33 12. Figure 2.12 Textile goods ................................................................................ 34 13. Figure 2.13 Agriculture goods ......................................................................... 34 14. Figure 2.14 Auto parts .................................................................................... 35 15. Figure 2.15 Electrical Machinery..................................................................... 37 16. Figure 2.16 Precious Stones ............................................................................ 38 17. Figure 2.17 Machinery .................................................................................... 38 18. Figure 2.18 Cotton .......................................................................................... 38 19. Figure 2.19 Soybeans ...................................................................................... 39 20. Figure 2.20 Wheat........................................................................................... 39
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LIST OF FIGURES - CONTINUED Figure Page
21. Figure 2.21 Feeds and Fodders. ...................................................................... 39 22. Figure 2.22 Dairy Products. ............................................................................. 39 23. Figure 2.23 Thailand GDP Growth Rate .......................................................... 40 24. Figure 2.24 USA GDP Growth Rate ................................................................. 41 25. Figure 2.25 Meeting Free Trading................................................................... 44 26. Figure 2.26 Agriculture in countryside of Thailand ........................................ 48 27. Figure 2.27 Anti-Retroviral AIDS Drug ............................................................ 49 28. Figure 2.28 Beautiful traditional textiles of Northern Thailand ..................... 51
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CHAPTER 1 - INTRODUCTION
1.1 Statement of Problem The reason that we choose to study the content about the international trading between Thailand and USA because nowadays trading is the one of the power that drives economics in globalization. Also the competition of trading is very interesting to analyze. The trading between Thailand and USA can also describe the relationship between the countries; politic policy, international, law and technology as well. There are the outstanding things in the studying about the trading between Thailand and USA. About America, it is the great power country of trading and being the monopoly of some products in some countries. Also the power of negotiation comes from the competition advantage from trading. It is because the market in USA is also the big top market among the world. So, this is the outstanding point that should be looking for; also, the trading history, problem and opportunity for the both of countries. The important thing of trading countries, Thailand and USA, is the long history since World War 2. Thailand and USA had the military policy and the international trading as the alliance countries. As also today that USA has more monopoly power in some importing products; such as, shrimp, parts of computers, electronic circuit and canned food. In some cases, we can reflex the relationship that USA has toward the other countries by inferring the relationship between Thailand and USA. It is very important to understand and analyze the trading between Thailand and USA because it can reflex the conducting, practicing, law and international policy of USA. These can effect to the other countries in that time by understanding from doing analysis. As to understanding the role, status, the international relationship because these factors has the relationship to each other. The interesting of the content that we will get from learning The international trading problems between Thailand and USA by the reason, outstanding and the interesting of the topic. Also the understanding in the international trading between Thailand and USA can help us to gain the idea and knowledge from the analyzing. So, we will understand the plausibility, dynamic of the economic and the power that was hidden by the great power country that has to the trading countries like Thailand. As Thailand and USA can be the case study and can use to apply as to understanding globalization society.
1.2 Connect Activity Our topic is connecting with the content of the lesson. There is The International trading Problems between Thailand and USA. All of the problem, we should understanding the problem and depth study as the understanding globalization such as how the relationship between the country, history, policy, trading, and the effect from the problem when its occur. Moreover, we can summarize the topic as where the problem comes from, what is the element of it, what is the factors that make the problem occur, how the problem stay, and how to eliminate the problem. All of those including with the tangible and intangible problem by the case study of earth, world, and globe by Same Same but Different chapter. In addition, the Conflict and Cooperation chapter will give the information of the relationship between Thailand and USA and study the world economic from Economic Dynamism. Some factor will effect because the culture, then it relate with the Considering Culture Diversity. Although the facilitate tools for communication, trading, and the distribution the information by Technology and the Global Change, and Globalization chapter. Sometime when the problem is occurring such as Tom-Yum-Kung crisis, it will have the Domino Effect as no one expect before. Until the role of Thailand trading with world stage by make the understanding with the problem of trading between Thailand and USA. 1.3 Outline The history of trading between Thailand and USA (for study about history and analyze some situation that occur and effect to the relationship of trading until the situations that make the problem occur, available , and gone).
History of Thailands trading History of USAs trading
The policy of trading between Thailand and USA (for study about all of the policy in Thailand and USA, and the supporting of trading between the countries). The trading between the countries law (for study about the step, procedure, and the prohibition of trading between the countries). The statistic, information, trading, export between Thailand and USA (for study about the increase and decrease information of the number of the export between Thailand and USA).
The important situations that make the problem occur with the trading between Thailand and USA (for study about the important situation that effect to the problem with the trading between the countries for the past to present.
Review and analysis of the important situation Review and analysis of the trading situation between Thailand and USA
The reflection of trading between Thailand and USA toward the international trading in global society (To study the international trading between Thailand and USA which lead to the affection in the global society) The conclusion of the problem between Thailand and USA, and the future of international trading between Thailand and USA.
1.4 Gantt Chart
CHAPTER 2 - INTERNATIONAL TRADING BETWEEN THAILAND AND USA
2.1 History of Thailand and USA trading 2.1.1 Thailands trading 2.1.1.1 Basic information of Thailand Location: Thailand is the country that located in South East Asia. Its neighborhood; North Myan Mar and Lao East Lao and Cambodia South The gulf of Thailand and Malaysia West Andaman Sea and Myan Mar Capital City: Thailand Official language: Thai and others (English, Chinese, Japanese, etc.) Government: Democracy under the Constitution of The kingdom of Thailand Area: Total area 514,000 kilometers or 198,457 miles and 0.4% of water. Population: 65.98 million (2007) Currency: Baht (, THB) Geographic: Thailand has varies of geographic. At the North part of Thailand, there are a lot of mountains. The highest point is at Doi Inthanon (2,576 meters), Chiang Mai. At the North-East part, it is the highland which connected with Mekong. In the central part, it is the low land connected with Chao Phraya which flow to the gulf of Thailand. At the south part, the area becomes more narrower and then become big again at Malay Peninsula. Reference: http://www.lonelyplanet.com/maps /asia/thailand/map_of_thailand.jpeg Figure 2.1: Location of Thailand
Weather: The weather of Thailand will be like the tropical area. The hottest weather is in April-May. The rainy season is in May-October. In November to March, it is dry and has the cool wind. However, this all except the South part of Thailand which has the tropical wet all year. Ethnicity: Thailand has varies of ethnicity, Thai, Thai-Lao, Thai-Mon, Thai-Cambodia, Thai-Chinese, Thai-Malayu, etc. Also, it includes the tribe as well, such as; Karen, Mong and others. These all are important to the way of life and Thailand culture. So, nowadays the population who is Thailand is about 75% , Thai-Chinese about 14% and others 11%. Religion: About 95% of Thai population is Buddhism, Theravada, Islam about 4% (Thai people who live in South part of Thailand), Christian and others about 1%. 2.1.1.2 Thailand - International trade Thailand has a long history of international trade. Beginning in the 15th to 18th centuries, during the reign of the Ayutthaya monarchy, foreign merchants who lived near the kingdom's capital conducted trade with foreigners. The country's first significant trade treaty was the Bowring Treaty in 1855 with Britain. Shortly after that, it also signed treaties with 14 other countries including USA, France, Russia, Sweden, Spain, and Japan. Table 2.1: Trade (expressed in billions of US$): Thailand Year 1975 1980 1985 1990 1995 1998 Exports 2.208 6.505 7.121 23.070 56.439 54.456 Imports 3.280 9.214 9.242 33.379 70.776 42.971
Sources: International Monetary Fund. International Financial Statistics Yearbook 1999. Today, USA, Japan, and the European Union continue to be its top trading partners, absorbing 52.6 percent of all exports in 1999 and supplying 48.8 percent of total imports in the same period. Its other partners are Hong Kong, China, and the Association of South-East Asian Nations (ASEAN) countries, the most significant of which are Singapore and Malaysia. Other countries apart from those mentioned accounted for 18.4 percent of exports and 21.6 percent of imports in the same period.
Thailand's major exports are rice, tapioca products, cane sugar and molasses, and rubber for agriculture; chemicals, polymers, and plastics for the manufacturing industry; and gypsum, natural gas, and feldspar for the mining industry. Bank of Thailand statistics as reflected in the Asian Economic Survey of 2000 identified the country's major export products as machine parts, circuits, frozen shrimp, prawns, sundry items, computer parts, garments, vehicle parts, and plastic products. On the other hand, its major imports are petroleum, integrated circuit parts, and chemicals. Figure 2.2: Balance of trade
The balance of trade was consistently negative until 1998, which means that the value of the country's imports was bigger than the value of its exports. The discrepancy was minimal in 1970, with import value exceeding export value by only US$541 million. In 1975, imports exceeded exports by US$1.072 billion, which doubled in 1980 to US$2.709 billion. In 1985, imports still exceeded exports by US$2.21 billion, which had quadrupled by 1990 to US$10.309 billion. In 1995, the balance still stood in favor of imports by US$14.337 billion. In a considerable reversal, imports in 1997 exceeded exports by US$5.319 billion but the following year, exports exceeded imports by US$11.485 billion.
Reference: http://seekingalpha.com/article/241818-tradebalance-the-u-s-is-a-net-exporter-of-solarproducts/ saupload_trade_balance.jpeg
Despite the uneven balance of trade, the Thai economy continued to grow by an average of 6.8 percent in the 1970s, 7.5 percent in the 1980s, and 8 percent in the early 1990s before the Asian financial crisis. This growth can be attributed to 2 factors, namely the boom of the tourism industry and the inflow of foreign direct investment. According to International Historical Statistics, in 1970, the services sector contributed 44.1 percent of GDP, which increased in 1980 to 49.7 percent. Though this contribution fell to 46.9 percent in 1999, it is safe to say that the dollar earnings from the tourism industry generated a substantial amount, enough to offset the trade imbalance. Foreign direct investment (FDI) is another major factor in the growth of the economy since the mid-1980s. In 1988, FDI infused US$1.25 billion into the economy, partly explaining the 7.5 percent growth despite a US$4.332 billion discrepancy in balance of trade in favor of imports. Foreign direct investment doubled to US$2.5 billion in 1990. Thailand is a member of several international trade organizations including the ASEAN Free Trade Area (AFTA), the Asia Pacific Economic Cooperation (APEC), and the World Trade Organization (WTO).
2.1.1.3 U.S. Relations with Thailand Bureau of East Asian and Pacific Affairs Fact Sheet 31 July, 2012 U.S.-Thailand Relations USA and Thailand established diplomatic relations in 1882 and signed a Treaty of Amity and Commerce in 1833. Thailand is a constitutional monarchy headed by a civilian government. Over the decades, Thai democracy has been interrupted by military coups and rule, and civic and political unrest. Thailand is a key U.S. security ally in Asia, and the country's stability and growth are important to the maintenance of peace in the region. Since World War II, USA and Thailand have significantly expanded diplomatic and commercial relations. USA and Thailand are among the signatories of the 1954 Manila Pact of the former Southeast Asia Treaty Organization (SEATO). Despite the dissolution of the SEATO in 1977, the Manila Pact remains in force and, together with the Thanat-Rusk communiqu of 1962, constitutes the basis of U.S. security commitments to Thailand. In 2003, USA designated Thailand a Major Non-NATO Ally.
Figure 2.3: U.S. Thailand Relations
Reference: http://www.thailand-business-law-center.com/wpcontent/uploads/2012/10/registering-a-tha-us-amitytreaty-company1.jpeg
2.1.1.4 U.S. Assistance to Thailand U.S. foreign assistance, in partnership with the Royal Thai Government, focuses on strengthening Thailands democratic institutions and our security cooperation both bilaterally and in the region. U.S. assistance aims to strengthen Thai efforts to reform the criminal justice system, promote good governance through democracy and rule of law activities, and invest in people through humanitarian assistance for displaced persons and control of the HIV/AIDS epidemic and other infectious diseases. USA also supports Thailands ongoing active contributions to regional and global security. Thailand and USA have longstanding cooperation in international law enforcement efforts. USA and Thailand work closely together and with the United Nations on a broad range of programs to halt illicit drug trafficking and other criminal activity, such as trafficking in persons. Thailand has received U.S. military equipment, essential supplies, training, and assistance in the construction and improvement of facilities and installations for much of the period since 1950. As part of their mutual defense cooperation, Thailand and USA have developed a vigorous joint military exercise program, which engages all the services of each nation and averages 40 joint exercises per year. The U.S. Agency for International Development (USAID), through the Regional Development Mission for Asia in Bangkok, supports regional, transnational, and bilateral programs. These programs include work on the responsible use of natural resources; reduction of the incidence of HIV/AIDS and other infectious diseases; prevention of human and wildlife trafficking; resolution of political conflict and increased citizen participation in political processes; and the achievement of an integrated Association of Southeast Asian Nations (ASEAN) community by 2015. USAID and the Thailand International Development Cooperation Agency ("TICA") are engaged in discussions on possible partnership to address development needs in third countries in the region. U.S. Peace Corps volunteers focus on primary education, with an integrated program involving teacher training, health education, and environmental education. In 2003, the Peace Corps also established an organizational development program aimed at promoting sustainable rural development in Thai communities. Figure 2.4: U.S. Assistance Worldwide
Reference: www.flickr.com/7187466629_80871fb480_z.jpeg 9
2.1.1.5 Bilateral Economic Relations USA is Thailands third-largest bilateral trading partner, after Japan and China, with total trade valued at more than $35 billion in 2011. USA is also one of the largest investors in Thailand, bringing in more than $466 million in net foreign direct investment in 2011. Leading Thai imports from the U.S. include machinery, chemicals, gold, optic and medical goods, aircraft, and agricultural products. Thai exports to USA include machinery, rubber, prepared meat, shrimp and tuna, jewelry, and other agricultural products. The 1966 Treaty of Amity and Economic Relations, the most recent iteration of the 1833 Treaty of Amity and Commerce, facilitates U.S. and Thai companies' economic access to one another's markets. The two countries also have agreements addressing sales of agricultural commodities and investment guarantees. The Thai-U.S. Creative Partnership builds on existing public-private and intergovernmental relationships, seeking to emphasize innovative industry, identify new opportunities for collaborative ingenuity between the two countries, and spur increased productivity. 2.1.1.6 Thailand's Membership in International Organizations Thailand is a founding member of ASEAN and strongly supports its efforts to promote economic development, social integration, and stability throughout the region. Thailand and USA belong to a number of the same international organizations, including the United Nations, ASEAN Regional Forum, Asia-Pacific Economic Cooperation forum, International Monetary Fund, World Bank, and World Trade Organization. Thailand also is a Partner for Cooperation with the Organization for Security and Cooperation in Europe and an Organization of American States observer. 2.1.1.7 Bilateral Representation The U.S. Ambassador to Thailand is Kristie A. Kenney; other principal embassy officials are listed in the Department's Key Officers List. Thailand maintains an embassy in USA at 1024 Wisconsin Ave. NW, Washington DC 20007 (Tel. 202-944-3600). Conclusion of history of trading between Thailand and USA In the last hundred years ago, Thailand and USA has good relationship together even some period both countries has the obstruction as military part or the barrier from USA. USA wants to create more power to make the balance. At the developed country, it is the way to show their power by international trade, and export the product with Thailand. It will reflect that international trading between great power country and small power country can trade together but it will have the barrier. The barrier always makes Thailand loss the benefit in every trading. Then the small country group together for resist the free trade which not equal in the world 10
2.1.2 USAs trading 2.1.2.1 Basic information of USA Capital City: Area: Population: Official languages: Religion: Government: Prime Minister: 2.1.2.2 Economic Nowadays, United State of America (US) is the biggest world economy and powerful of technology in the world. The US has income per capita GDP around 46,900 U.S. dollars per year The U.S. economy has the system focuses on the market-oriented economy which is the theory came from Socialist Theory. So, government sector has the policy to encourage private sector decision-makers in the economy. And has the advantage of flexibility in investment decisions, labor decisions and new product development more when compare with the Europes countries and Japan. However, US were disadvantaged in terms of access to the international market compared with competitors who want to enter the U.S. market. The long-term problem of US economy include with the lack of investment in economic infrastructure, the increase in medical costs and retirement benefit funds, trade deficit and the budget. The goods trade deficit in 2550 was approximately 847 billion U.S. dollars which is a highest record but declined slightly in 2551 (840 billion U.S. dollars). Due to the value of money was weaker than the major currencies of the world. That makes the U.S. imports increase and stimulate competitiveness for export. After that in middle of year 2551, the global economic was downturn, the sub-prime crisis, the collapse of the investment bank. The housing prices were decreasing. The US launch the fund is called Troubled Asset Relief Program (TARP) for help the money crisis. Washington 9,826,630 Square Kilometer 310.3million) 2010) English Protestant, Roman Catholic Federal Republic Mr. Barack H. Obama Reference: www.thinkasiainvestthailand.com/ usa_01.jpeg Figure 2.5: USA Map
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2.1.2.3 Important policy in term of international trade USA under the president Obama will support the implementation of trade policies to protect domestic industry. It is say that just like a fairly beneficial and does not cause damage to the U.S. workforce. Moreover the U.S. still has strengthening the enforcement of environmental protection standards which are more stringent by summarized as follows. 1. The Doha negotiations that support to make the Doha a success with increasing pressure the World Trade Organization (WTO). Therefore oversee the implementation of the national agreement and to stop foreign governments. To take measures to subsidize exports to America and measures as barriers to trade and non-tariff barriers to exports of U.S. goods and services. 2. A Free Trade Agreement (FTA) promise that they would oppose trade agreements such to undermine the economic security of USA. They will fight to open foreign markets to support the creation of jobs for USA. 2.1 Speak for the negotiation of the North American Free Trade Agreement by adding content about the environmental protection. Also, warning that it will withdraw from this agreement, If Canada and Mexico did not agree to open new negotiations. 2.2 Against U.S. - South Korea Free Trade Agreement, If no amendment of the U.S. safeguard measures and not opening cars market of Korea to the USA market anymore. 2.3 Against the free trade agreement with Colombia because of the lower labor standards. 3. Trade Promotion Authority (TPA) to improve the process of negotiating authority to the Fast Track to Management. (Give the power to negotiate trade agreements with foreign countries. Then come to the Parliament for approval. The Parliament can vote only "Yes" or "No" unable to resolve the details of the agreement) The process that must be monitored to potential partners to come to an agreement on free trade with USA about labor and environmental standards. As well as other factors. 4. Offices United States Trade Representative (USTR) to focus on monitoring the application of the trade agreement of the other partners in strictly designated as a top priority of the USTR will also add support for both side of budget and personnel for the USTR to conduct a more effective accountability. 2.1.2.4 Policies that affect the Southeast Asia The relations between United States and countries in Asia seem to be a stable but stagnant in the past few years. Because the U.S. government focusing on preventing the weapons of mass destruction and the war against terrorism. From the introduction and implementation of U.S. policy in Asia.
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In addition to the importance of cooperation in the ASEAN ARF APEC and the East Asia Summit, however, that China and Asian countries have to cooperation in research and prevention diseases that occur may take APEC to be cooperation, however, the U.S. foreign policy also, depending on the follow. 1) World situation during the first year of taking. If no other crisis, it was distracting USA will turn attention to the Southeast Asia, 2009 that Singapore will be the head of APEC which the U.S. president to visit the region in the first year. 2) The persons to be appointed in positions such as the U.S. Trade Representative, Minister / Deputy Minister / Assistant Minister / Deputy Assistant who will be responsible of Southeast Asia. And will play an important role in determining policy towards the region. 2.1.2.5 International trade policy towards the region USA will strengthen ties with Asian partners, both regional and multilateral levels to build confidence security in Asia and the resurgence of the U.S. recovery and the promotion of trade and the rule of law. Countries should cooperate with USA. To increased domestic consumption and increasing their imports agreed that the APEC cooperation is beneficial to the role of USA. In Asia, by open the new trade agreements with USA. They must include labor and environmental standards. Also open markets for U.S. goods and protecting the rights of the parties. 2.1.2.6 Policy to ASEAN U.S. will make relation with countries in Asia (Japan, Australia, the Philippines, Thailand and Singapore) and new partners (Indonesia, Vietnam and Malaysia) and will focus on ASEAN more. Not only in the field of counter-terrorism and maritime security but economic, democracy, good governance, sustainable economic development and environmental protection. Currently, USA pending the East Asia Summit (EAS) and also expressed regret that the Government of President Bush ignored the role of regional organizations in Asia. And open space to China and Russia took the role instead. Recently USA Signed to join the Treaty of Amity and Cooperation (TAC) in the condition it was in 2009, as well as Australia signed the TAC in 2005, provided that the TAC shall not affect the obligation of Australia existing bilateral and multilateral, including the UN Charter.
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Figure 2.6: 4th ASEAN-U.S. LEADERS MEETING
Reference: blog.futureforeignpolicy.com/ASEAN-human-rights.jpeg
2.2 The policy of trading between Thailand and USA 2.2.1 Trade Policy of Thailand Thailand has 2 policies for trading; there are protective trade policy, and free trade policy 2.2.1.1 The protective trade policy
The protective trade policy is the policy which support domestic product. Then, it uses to control the export for prevent the shortage of product in the country and import product for support the production in the country. The country can use the protective trade policy by tariff wall, set the quota, subsidies, dumping, trading condition, and control currency.
2.2.1.2 The free trade policy The free trade policy is the policy which supports the country to cooperation and trading together as freedom. The government cannot intervene the trading. The free trade policy must follow; no have tariff wall not collect the tax or collect as the low rate and the same rate no privilege and no restriction of trading trading with the most product that the country expedient
1. 2. 3. 4.
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2.2.2 Trade Policy of USA 2.2.2.1 USA Policy 1. Support the system of trade rule The USA must act follow by the contact in WTO for prevent the right and benefit of trading in the system of trade rule. Promote for social responsibility and transparency of political The government needs the trade policy which responds to the social. Then, the government must support the people to have the participation for comment the trade policy. Also, it needs to establish advisory sector. Support to have the better environment The trade is the important tool for identify the target of energy and environment. Then, the government needs to respond for the change of the weather and the resource. The deal of trade will solve the problem which does not terminate at now The government responds to problem which from the conflict as decrease tax. It makes the other effect to the trade. USA concerns about the measure in country and measure of deprive the trade. There is the barrier for entry to the foreign market. So, USA will negotiate for development the transparency. And the government will seek for opportunity for open new market and protect the artifact and innovation. The agreement of free trade and treaty of investment as BITs must transparency The government will concern with the benefit and stockholder of trade such as the agreement of trade with Columbia, Panama, and South Korea. Support to be the partnership with the developing country The economic growth of developing country will gain the benefit to the USA economic. Then, the government will support the policy and assistance for technical to those countries.
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2.2.2.1.1 Policy / measure of U.S. trade USA is truly a country importer that supply and consumption goods and used within the country imports almost all of the trade barriers. USA is to be determined for the trade true if there is potential in the form of legislation that intended to help protect and promote the opportunity for competition to the industry in the U.S., the product is the product / same or similar to the level of imports in USA believe that USA will cause damage to the domestic industry in these measures are being used more frequently. USA is the alleged dumping and dumping duty imposed for a special case. All of the strategy to trade this way caused by the introduction of a domestic industry that has been damaged or the unfair competition from the imports and tactics used by the U.S. government to decide whether it is true or not dumping. The strategies considered to be beneficial to the parties their best, however, the measures of USA, most of the countries that are parties to fight hard both in the form of negotiation with the government and trade Organization (WTO). Actions of this type will occur from time to time and any one time. Thailand is currently facing a range of trade barriers in a way that is recognized widely and has an impact on Thailand's export trade in most products such as frozen shrimp, which is a major export product of Thailand. U.S. law states that a list created with the goal to defend the national economy and the protection of consumers is important and not a set make a trade but when it is used that those laws which are the product requirements production management and logistics strict and thorough insight into the finer details become obstacles and facilitate trade, and often a smooth block and the opportunity to market the product any several items. A trade barrier on a mistake of this type occurs, it is very effective and time in a long time and difficult to cancel or change through international negotiations from all of this legal entities USFDA (Food and Drug Agency), USDA (U.S. Department of Agriculture) and ATF (Alcohol, Tobacco and Firearms Agency) is important. The product is more effect of law that agricultural products, food and drink medicines and health products and beauty products. Thailand's major products are delivered to market potential in USA (except medical products). Decentralize system of government in USA is make trade barriers, both performed by the intended and unintended consequences of the legislation is aimed at protecting the country and the consumer that can occur frequently that effect or enforcement throughout USA and specific to each area. These laws have become a trade barrier or some products from certain countries or through instilling fear and resistance in the supply of goods or merchandise to the consumer such as law Preposition 65 in the state of California and the warnings of the dangers of lead residues in various ceramic and porcelain or quantity and warning of the dangers of mercury that residues in food.
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2.2.2.1.2 Trade agreements USA has a trade agreement as follows; 1. Global trade agreements that action with the International Trade Organization, WTO. 2. Regional trade agreements. 2.1 Free Trade Area of America (FTAA) 2.2 ASEAN Initiative 2.3 North American Free Trade Agreement (NAFTA) 2.4 Middle East Free Trade Initiative (MEFTI) 2.5 Asia-Pacific Economic Cooperation (APEC) 3. The agreement between two parties. 3.1 Foreign Trade Agreement FTA and - Australia - Bahrain - Chile - Israel - Jordan - Malaysia - Morocco - Oman - Panama - Singapore - South Korea - South Africa Customs Union-SACU FTA - Central America- Dominican Republic (CAFTA-DR FTA) 3.2 Bilateral Investment Treaties (BITs) 3.3 Andean Trade Promotion Agreement TPA - U.S-Central Asian (Kazakhastan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan) 3.4 Trade and Investment Framework Agreement (TIFAs) - Columbia Trade Promotion Agreement - Peru Trade Promotion Agreement - U.S-Uruguay BIT - U.S-Common Market for Eastern and Southern Africa (COMESA) TIFA - U.S.-West Africa Economic and Monetary Union (WAEMU)
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TIFA - U.S.-Afghanistan TIFA - U.S.-Algeria TIFA - U.S.-ASEAN TIFA - U.S.-Australia TIFA - U.S.-Bahrain TIFA - U.S.-Brunei TIFA - U.S.-Cambodia TIFA - U.S.-Ghana TIFA - U.S.-Indonesia TIFA - U.S.-Kuwait TIFA - U.S.-Lebanon TIFA - U.S.-Malaysia TIFA - U.S.-Mauritius TIFA - U.S.-Mozambique TIFA - U.S.-New Zealand TIFA - U.S.-Nigeria TIFA - U.S.-Pakistan TIFA - U.S.-Philippines TIFA - U.S.-Qatar TIFA - U.S.-Saudi Arabia TIFA - U.S.-Singapore TIFA - U.S.-South Africa TIFA - U.S.-Thailand TIFA - U.S.-Tunisia TIFA - U.S.-United Arab Emirates TIFA - U.S.-Yemen TIFA 2.2.2.2 Agreement under WTO The agreement under the WTO has 3 types; 1. Open the market 1.1 Deduce custom duty of the industrial product (include fishery product) Every country reduce the duty as 33 percent within 5 years (begin in January,1995) - Do not collect the special fee, if it still no have fee or does not specify before 1.2. Agricultural product Every country must cancel the measure of forbid to import and use custom duty substitute as those measure Reduce the duty as 36 and 24 percent by reduce at least 15 and 10 percent in each product within 5 and 10 years for developed country and developing Decrease to support the agricultural product in the country and export 18 -
1.3 Textile Open the free trade of textile and clothes instead of Multi-Fibre Arrangement: MFA by; Cancel the limit of import under MFA in 10 years Expand the quota of import product which did not enter to GATT as continually since 1995 2. Rule of trade Adjust and determine of the important trade rule such as; Agreement of the measure which relates with sanitation and sanitation of plant; allow the member country to determine the level of safety and verification of the import product. Agreement of retaliation for dumping; set the method and the way to investigate the country which dumping in the market. -
3. Other Agreement for operation which GATT did not set rule before. There are; Intellectual property of TRIPS; set the scope and the method to prevent the intellectual property such as patent, trademark, right of design, integrated circuit, geographical indication, and trade secret. Trade in service; set the normal agreement of trade in service by the method which the same as GATT. For example, principle of non-discrimination, transparency, and slowly of liberalization. Measure of trade that relate with TRIMs; to set the important method such as every county must cancel the measure which deprive the import. The developed country need to cancel as 2 years and developing country need to cancel as 5 years for local content requirement.
Therefore, the trade policy of Thailand and USA are related with free trade and agreement of WTO but it has some restriction too. However, Thailand and USA still to use protective trade policy to control the goods in domestic. If the country import or export a lot of product, it will have the problem with economic.
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2.3 The important situations that make the problem occur with the trading between Thailand and USA The relationship between Thailand and the USA begin from the trading in early 19th century. In 1833, there is the contract of sale between Thailand and USA. Later in the year 1856, during Rama IIII, it had the formal establishment of diplomatic relations between these two countries. Then, Thai international trade was rapid expansion. However, the USA merchants still did not trade with Thailand that much because Thailand is too far away and the journey was inconvenient. During World War 2 (1939), Thailand and USA has a close relationship with each other and change relationship from ordinary to a special friendship. That is because USA become a major superpower after the war and they prescribe new economic policies. As a result, Thailand had increased the export to USA. In 1980, Thailand began to increase the economic development and also USA began to reform its economy which is to make the trading policy in an aggressive way. In the late 1980s, USA have legislated the new trading law, Omnibus Trade Bill. In 1985, there is the conflict between Thailand and USA, also in the trading and exporting parts. These conflicts were continued for 10 years. USA almost is the one who threatening to cancel the Generalised System of Preferences, GSP since 1976 without any conditions. First generation of GSP was expired in 1984. USA had adjusted policies about GSP by set the countries which will receive the benefits under the GSP as the second generation. That is because the expanding of exports from Thailand to USA has growth up as 30 percent per year. It makes the risk that Thai product will be cut out from GSP is very sensitive as the overall. The next important event is The Tom Yum Goong crisis in 1997. It is the period that the foreign policy was changed to USA. It is because when the economic crisis happened, USA started to be important to Thailand again. Thailand receive the support from USAs economy about 2billion USA dollars. Also, the export from Thailand to USA had increase as 354, 553million baht, about 39.7percent. In 2001, FTA was based on the basis of mutual benefits (win-win situation). FTA will increase the opportunities for exporters. In the view of the manufacturer, some group can produce and export more because the duty tariff of FTA agreement with the USA. However, later on when Thailand was abolished in 2005 with the coup on 19 September 2006, the FTA between Thailand - USA was stopped. In 2007, the USA economic market became slowed. Thailand exported shrimps to USA decreased about 7.58% in the same period of last year. As a result, the purchasing power of consumers in country has decreased as well.
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In 2011, President Obama had a trip to Asia in order to "open up markets and increase the exports to USA" and the problem of unemployment in the USA also has not been improved. Nearly 15 Million peoples in USA were still unemployed. Moreover, the unemployment rate remains high at 9.6%. For USA, the domestic consumption has a high proportion of GDP. So, if the highest unemployment is too high and people concerned that there will be no future income in the future. It will make the consumption become lower. Also, the imports will be reduce as well because USA still import Thai goods especially rice and frozen shrimp as number one. In 2010, there is the flood in Thailand. From the report of Fisheries Agency of the National Oceanic and Atmospheric Administration (NOAA), it told that the imports were decrease 3.4% as123.3 million pounds. The main reasons become from the scarcity of shrimp from Thailand as due to flood. This affects both of the production, distribution of goods and others because USA imports shrimp from Thailand the most. The latest situation as Obama visited Thailand after receives the position. Mr. Kosit Punpiumrath, the president of Bangkok Bank Public Company (Limited), said that the visit to Thailand of Mr. Barack Obama, President of USA believe that it good for the negotiations of the strategic partnership in Trans Pacific Partnership (TPP). Especially, to export the product to the new markets in Thailand that USA never negotiates about trade with Thailand before. At a present, the trade between Thailand and USA has 10 percent continued to grow normally. Nowadays, the trade has continually negotiating between Thailand and USA.
2.4 The Politic of Thailand and USA 2.4.1 Politic of Thailand Thailand under prime minister Yingluck Shinawatra after flooding in last year and the problem of conflict about people who are different opinion. It make other counties look Thailand is not secure of politic. This point it is make Thailand must solve the problem inside the country along with relationship to other countries and return to the normal satiation and promote trade in the region and expand export into economic base. 2.4.1.1 Policy on Foreign Affairs and International Economic 2011 1. Expedite the promotion and development of relations with neighboring countries by enhancing cooperation between the public sector, private sector, people and the mass media in order to cultivate mutual understanding and instill closeness among all sectors which will lead to expanded cooperation in the areas of economics, trade, investment, tourism promotion, transportation and others under sub-regional frameworks so as to promote good neighborly relations.
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2. Create unity and promote cooperation among ASEAN countries in order to realize the goal of creating an ASEAN Community, as well as promote cooperation with other countries in Asia through various cooperative frameworks, and prepare all sectors for the move towards becoming an ASEAN Community by 2015 in the economic, socio cultural and security areas. 3. Take on a creative role and promote the national interest in international organizations, specifically at the United Nations and regional organizations in order to preserve peace and security, promote the democratic process, human rights, humanitarianism, the environment and sustainable development, as well as cooperate to address all transnational issues that affect human security. 4. Strengthen cooperation and strategic partnership with countries, groups of countries and international organizations that play important roles in global affairs in order to boost confidence in Thailand, as well as build capacity and immunity for the Thai economy. 5. Encourage people-to-people contacts with foreign countries, as well as promote a positive image and technical assistance with developing countries so that people, governments and the international community will have positive attitudes toward the Thai people and Thailand. 6. Promote public awareness and understanding of border issues and global changes that affect Thailand so as to forge consensus in the formulation and implementation of foreign policy. 7. Support People Diplomacy to safeguard the interests of Thai nationals, as well as protect Thai nationals and Thai workers abroad, specifically those employed and living overseas, in addition to strengthening and promoting the role of Thai communities in preserving their Thai identity. 8. Utilize regional connectivity within the ASEAN region and sub-regions in order to expand the economic base in terms of production and investment, prioritizing the development of provinces and groups of provinces situated along the economic corridors and border areas. 9. Coordinate the work of government agencies overseas in accordance with the Team Thailand policy in order to carry out foreign affairs efficiently, effectively and with high quality. 10. Promote close cooperation with Muslim countries and Islamic international organizations to create a correct understanding that Thailand is working on resolving the issue of the Southern Border Provinces, as an important internal issue, by following His Majesty the Kings advice to Understand, Reach Out and Develop.
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2.4.2 Politic of USA Politics in the U.S. just came through an election. The results of the election that the president Barack Obama's presidency is that of the 2nd. President Barack Obama focused on the issue in the country because economic problems in USA. In 2012, President Barack Obama was visit to Asia for make trade relations with other countries of Asia and treat the balance of trade in China between Asian. It shows that USA aware of the importance of other countries in Asia. 2.4.3 Relation between Thailand and USA After the situation of September 19, 2006 USA has no interaction with the Minister and the suspension of military aid. However, the relationship was back to normal quickly after the election in USA. In 2008 was the year of the 175th anniversary year of the Thailand - U.S. that 2 countries have used the chance for promote the relationship between the 2 countries from activities focused on understanding and feeling good at all levels including the promotion of relations between citizens of both countries. In 2009 by the exchange of ministerial Minister of Foreign Affairs and Chancellor of the Exchequer visit USA on April 2009, Ministry of commerce visit to the U.S. and March 2009 Chancellor of the Exchequer visited USA. In June of 2009 Minister of Foreign Affairs Mrs. Hillary Clinton visited Thailand to attend the meeting of the 42 ASEAN Post Ministerial Conference and 16th ASEAN Regional Forum (ARF) in Phuket. In July, 2009 has bilateral meeting with the Prime Minister and Minister of Foreign Affairs. It has activities and makes confidence of Thailand within USA of The Prime Minister in the occasion of the 64th UN General Assembly meeting in New York in September 2009, that which has make the confidence of the business and the public sector. In April 2010, President of Trade Representative Thailand as the special representative of the Prime Minister visited to the U.S. and clarifies the political situation in Thailand in June 2010 2.4.3.1 Ally Thailand USA: Past and Present Lohman has analyzed the relationship between Thailand and USA and its allies have been the following 5 part. 2.4.3.1.1 Economy Thailand is a major trading partner of the U.S. trade in 2010 amounted to nearly 32,000 million and it make Thailand is a country which ranked the 23 states of the U.S. investment in Thailand in 2010, with nearly 13,000 million.
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Thailand and USA have the Treaty of Amity and Economic Relations Under the treaty. Under the treaty the U.S. companies is equivalent than Thailand companies. The U.S. is the only country that has this right; however, U.S. exports to Thailand still having the problems. Particularly with regard to tax measures, while China's FTA with Thailand is an opportunity for trade with China and Thailand. China is a more advantage to USA, although in 2004 the FTA negotiations between Thailand and USA. But the negotiations were interrupted since a coup in 2006; although the USTR will not have an official release that the possibility of resurrecting the FTA between Thailand and USA but recently, Senator Richard Lugar, Republican of African has presents the motion for urged the USTR negotiations with FTA and ASEAN. The article of Lohman in the Heritage Foundation has analyzed 2 major challenges for the Alliance Thailand - U.S. that the first is the political turmoil in Thailand and the second is the rise of China. First, Thailand's political turmoil that it is many parties in the U.S. has the question about the benefits of the alliance between Thailand and USA. Dependence on Thailand as ASEAN channel has been destroyed and loss more the credit in ASEAN. It makes Thailand's political efforts to revive the alliance Thailand - United States is limited by the political leaders of Thailand, which is not the real leader of Thailand and no coordinator for relationship between Thailand and USA and no person who interact with the leaders of USA. And the last, the challenges for the alliance between Thailand USA is the rise of China. Thailand and USA are the view that the rise of China all together. The strategy of U.S. is to block the expansion of China influence in the region. USA regarded that China is likely to be a threat. But while Thailand look back to the rise of China as an opportunity of economic and political in Thailand that China is offering to Thailand. 2.4.3.2 Ally Thailand USA: The Future Heritage Foundation has proposed that USA government that should strengthen the relationship between Thailand and USA and revive the alliance between Thailand and USA. The proposal as follows; 2.4.3.2.1 Enhance relationships The two countries should enhance the exchange of high-level bilateral visits of the past. Leaders of the 2 countries will meet in a multilateral forum ASEAN or APEC. It is making the organization to enhance Thailand USA will occur.
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2.4.3.2.2 Focus on mutual benefits To reviving allies should aim to cooperate with mutual benefit, such as protecting international trade, promote democracy for stability in the region, military cooperation for cooperation in the fight against terrorism, so the two country can work together to make it meaningful. Thailand USA should enhance the bilateral of Thailand USA such as the USThailand Strategic Dialogue, which in the present that discussed in the secretary of state and the director-general. They should raise the level of Foreign Ministers and the present has meeting in 2 times per year, then there should be change a meeting once a year. 2.4.3.2.3 Revive negotiations FTA of Thailand USA Negotiations FTA of Thailand - USA, which halted after the 2006 coup, it should return to negotiations together. When the government of Thailand already and USA should be invited to participate in the FTA of Thailand by the U.S.. USA pushing the region is the Trans-Pacific Partnership, or TPP, the U.S. policy makers must not forget that Thailand Trade - China has increased significantly after the two countries have doing FTA , so the U.S. will have to negotiate FTA with Thailand. Otherwise USA would be disadvantaged with China. 2.4.3.2.4 Critic If Obama's government amenable to these proposals and adjust policies to Thailand and revive relationship with Thailand follow those proposals. Thailand will benefit greatly. The main issue is the upgrade of relationship that the proposed Obama visited Thailand to enhance US-Thailand Strategic Dialogue. It is the way to use Thailand channel to ASEAN and to revive the FTA Thailand USA. However, the major obstacle to closer ties Thailand USA is conflict and political turmoil in Thailand that uncertain future and other factors that are obstacles that the U.S. strategy for the region is different from the past from Hub and spokes system that focuses on 5 countries (core partners) in the U.S., but now the new strategies that are more intricate. Multilateral framework has been extended more. At the same time USA has been extended to partners from the same country, but now there are only 5 states are close to many other countries in the region, especially Indonesia and Vietnam. It make USA has more options and Thailand has less important to USA, while Indonesia and Vietnam are likely to be more important to USA. In 2012, President Obama's visit to Thailand and have made several agreements on the Trans Pacific Partnership (TPP) is a part of the military and security matters that the relationship between Thailand and USA, which has ties in trade and security. Especially when viewed from the frame of the TPP and the military. Trans-Pacific Partnership has objective for promote the establishment of free trade area between them faster.
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2.4.4 Critic (Strategic of Thailand to USA) Obamas government has pushed for the establishment of the new FTA with the name as call Trans-Pacific Partnership or TPP. TPP has high standard more than FTA and it will be the most advanced. There are plans to expand the number of members from 9 countries to expand coverage in the Asia-Pacific region. TPP will become the largest FTA in the world. In the past the U.S. is lobbying nations to join the TPP, including Thailand. Objective of TPP is protecting USA from the rise of China economic and integration of countries in the region. 2.4.4.1 Impacts of Thailand from TPP Benefit of TPP, Thailand will be FTA with USA but the point is we have to negotiate FTA with USA during the Thaksins government although we may be able to benefit from the export of certain goods to USA. It has many branches that are disadvantage such as in particular, the commercial sector, intellectual property, and linking trade with labor standards and the environment. In summary, USA would more benefit from the establishment of TPP but Thailand is not anything substantial and many negative from TPP. 2.4.5 Conclusion: Politic of Thailand effect to USA In conclusion, Politic of Thailand has more effect to USA because the problem of conflict politic in Thailand. It makes the contract between Thailand and USA stop or disruption. Also, the law of Thailand is unclear then it makes Thailand loss opportunity for trading with USA. Moreover, USA has hidden benefit to trading with Thailand for control the balance of China power. Then, it affects to the TPP agreement which Thailand will lose the benefit of trade with USA and Thailand may have the conflict with China too.
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2.5 FTA between Thailand and USA 2.5.1 Free Trade barrier between Thailand and USA The Rate of non-tariff barriers in Thailand and USA; Thailand take measure about non tariff barriers with goods import from USA about 14.10 %.Which the production has a high level of obstruct such as the other cereals (100.00%), vegetable, fruits and beans (94.07) ,ranch (83.12%),product of domestic animal (77.80), product of meat (95.78%) , sugar (29.17%),product of foods (62.74%), clothes (38.01%) , product of woods (33.29%), other industry (28.99%) Figure 2.7: Textile
Reference: http://www.bsnnews.com/news/index.php?NewsID=8565 0-2011042563401Z7.jpeg USA take a measure about non-tariff barriers with goods import from Thailand about 87.38% which the production has a high level of obstruct such as vegetable - fruits and beans (96.37%), other vegetation (73.54),product of domestic animal (94.38),product of meat (100.00%), Milled rice (98.31),product of foods (99.38), textile (83.10),clothes (97.25), product of wood (56.76). So, you can see that product of agriculture and have many types about high hinder to processed products from agriculture of Thailand The analysis found that USA have free trade barriers with Thailand which main issue of Thailand get effect from free trade barriers is the export of Thai foods to USA Black tiger prawn: In 2002 2003, Thailand export a lot of black tiger prawn to USA and price lower than the domestic price .Made to USA black tiger prawn dumping filed of Thailand in 2004 and after, the export in Thailand to a halt and make to the export to lose more than 20,000 million Baht or 40 % of all black tiger prawn export of Thailand.
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Figure 2.8: Black tiger prawn
Reference: http://news.sanook.com/917711/%/koong.jpeg Canned pineapple: USA is the main export market of Thailand always but in 10 years ago Thailand's exports of canned pineapple is decreased. Since the year 1996 - 1998 is worth about 5,763 million Baht. It has reason from USA take a measure of Thailand canned pineapple anti-dumping and cause comparative advantage reduce and cant increase market because The loss of income from market more than 1000 million Baht and exports decreased to 120,000 tons. Figure 2.9: Canned Pineapple
Reference: http://www.oknation.net/blog/print. php?id=848290/615609330.jpeg
And then, the one point to make Thailand that is affected about generalized system of preference is generalized system of preference for Tax-Deductible to developing countries and Thailand get it right .But Thailand comparative Advantage about foods has a significant impact such as Thailand takes to debar from generalized system of preference about canned pineapple in Europe while Kenya gets it right Thailand takes to debar from generalized system of preference about shrimp in Europe which cant Increase the shrimp market.
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USA define Non-Tariff Barriers is Food Security Act of 1985, trade and ability to compete measure of 1998 and other measure of USA create for Control of health care and Environmental conservation have effect to export from Thailand to USA. Especially, Product about sea foods and Ready-to-wear which in turned around are if USA take these measures make Thailand export to market of USA decrease but 3 trade barriers of USA that havent affect to rice export which USA is largest rice exporter of the world inferior to Thailand and rice import from Thailand are high quality and it difference from rice of USA. For the antecedent are National income of USA found that if revenue of people in America increase as Economic theory says that when the revenue increased, demand for consumer goods will increase. As a result, they have benefited from Thailand market export and make to the demand of U.S export increase such as Agricultural crops, Beverage, tobacco and others industries. 2.6 Non-tariff Form of barriers of trading between Thailand and U.S.A. Thailand has export many type of products to USA. When Thailand has export the products to other country they must has problem about barriers of trading in import country. The barriers of trading have many types, so in our products have effect in some type of barriers of trading. In first type is Sanitary and Phytosanitary : SP is process for set the safety standard that make more barriers for import. The case of Thailand has the problem about export to USA. That product is shrimp because in the past Thailand met the problem that find the lead inside the shrimp. From this reason make to USA focus on safety standard of shrimp of Thailand. About other barriers trading type is Anti-Dumping: AD is barriers to add the tax for import. The product that Thailand has effect such as; Shrimp and Canned pineapple. In Thailand is one main factory for produce the part of electronic for export to other country, but many times that Thailand has problem about pirate, so the USA to focus on Technical Barrier to Trade: TBT for this type is set the standard of trading and it can be an barriers in commerce. Once kind of barriers of trading is Labor measures. This kind set for protect the hire child labor and outsider labor. So, the USA focus on this problem because in Thailand has main problem about some factory hire child labor and outside worker in low rate. In main problem in Thailand are many factories hire child labor in low rate
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2.6.1 Type of barrier for trading between Thailand and USA The export goods from Thailand to USA have many categories. If the product has export as large amount, USA will set the barrier for obstruct the import product. Then, Thailand has a big problem with Penaeus monodon in 2002-2003. USA has the security barrier with Penaeus monodon by use sanitary and phytosanitary(SP) measure to examine the food safety. It is the way to increases the trade barrier; for example, USA use sanitary and phytosanitary to check the lead in the shrimp from Thailand. Also, they have another barrier such as Thai labor measure which uses child labor or not. In addition, USA increases the import tariff to anti-dumping as canned pineapple, shrimp. Figure 2.10: The process in Shrimps factory in Thailand
Reference: http://ambkristie.us/page/10/tumblr_lqubfqhv60 1qg5vj3o1_500.jpeg
The electronic circuit board from Thailand has the barrier as Technical Barrier to Trade (TBT). There is the measure which use to determine labeling and packaging as high quality. Then, it affects to Thais electronic products because Thailand has the problem with intellectual piracy and the labor which include the child labor and illegal labor. So, the industries that have the problem with technical and labor barrier are canned food and textiles.
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2.7 Market Share of Thais export goods Table 2.2: Export of consume product in 2007 Rice Canned seafood and processed food Dollars 3,467.43 3,165.46 Percentage of expansion 34.24 6.43 Percentage of proportion 2.25 2.06
Table 2.3: Export of consume product in 2008 Rice Canned seafood and processed food Dollars 6,204.08 3,905.55 Percentage of expansion 78.92 23.38 Percentage of proportion 3.49 2.20
Table 2.4: Export of consume product in 2009 Rice Canned seafood and processed food Dollars 5,046.46 3,718.27 Percentage of expansion -18.66 -4.80 Percentage of proportion 3.31 2.44
Reference: Information and Communication Technology Office, Office of the Permanent Secretary Ministry of Commerce. http://www.ryt9.com/s/beco/1328517 Conclusion: Market Share of Thais export goods In year 2009, percentage of expansion is decrease because in Thailand have problem about the political. This problem made USA not belief in Thailand. It is effect to the export goods of Thailand directly. After that, when this problem was solved by new government the situation of export goods in Thailand was better.
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2.8 Why does Thailand do Free Trade Agreement: FTA? What are the benefits? In the present, the world market competition is very strongly. Thailand needs to depend on international trade more. In the international, to import goods is harder, both of the tariff threat and the others like tariff that limit the quantity of imports good. In many countries improved the quality of producing more products. For an example, in 2012, the exporting of Thai Rice product becomes more severe. As come from India which tries to send their white rice and stream rice again after they stopped for three years. This makes a result to Vietnam who is the main competitors need to reduce the price of exporting white rice as to compete with India. However, the price of exporting Thais rice is still at high as compares to other countries. So, the countries that always buy rice prefer to import rice from India and Vietnam more than Thai. Thats why it makes the exporting of Thais rice decreasing, as compare to 2011 which is the highest year of exporting of Thais rice. The export is the important part to drive Thai economics. So Free Trade Agreement is important for helping to keep old market and expand trading for new market. More opportunity to export Thai best quality goods and service. Reduce tariff barrier and nontariff barrier. Reduce uncertain Generalized System of Preference: GSP. Then, attract foreigners to offshoring and more investment in Thailand while support Thai people to invest in abroad. Push forward to expand economic cooperation in term of export so Thailand has to work in two parts in the same time. First part is penetrate the market / promote exporting, in another part is reduce trade barrier of enter to the competitor markets so we must to negotiate step by step for reduce trade barrier. In 20 years ago the negotiation was GATT/WTO by 100 members together (Now WTO has 153 country members). In 10 years ago the negotiation changed from WTO to FTA such as EU, NAFTA, EU-Mercosur, and FTA between countries. Thailand need to negotiate for keeping margin of Thai competition to not be adverse the competitor markets because they will get extra tariff measure or non-tariff measures more than Thailand. Not only more distribution channels goods to nearby region such as India to make them as offshoring to the countries in South Asia, but also reinforce investment for increase the numbers of foreigner investor in Thailand and support Thai people to invest in abroad. More international alliances for more strong power of world negotiation. And finally, the consumption will get better consume and more choices to select the diversity and cheap goods. We found the points as below; Export-driven : Market access Reduce trade and investment barriers. Expand investment. Inflows and Outflows. Cost reduction/ Resource-seeking. International alliance and Capacity-building.
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2.8.1 The countries where do Free Trade Agreement with Thailand Not only ASEAN Free Trade Area (AFTA), but also now Thailand does Free Trade Agreement with Bahrain, China, India, Australia, and New Zealand. Other then, in the present, Thailand negotiates Free Trade Agreement with United States of America (USA), Japan, European Fair Trade Association (EFTA), and Peru. 2.8.1.1 Negotiation Free Trade Agreement of Thailand and other countries Figure 2.11: Free Trade Agreement of Thailand
Thai-Bahrain 29 December 2002 Thai-China 1 October 2003 Thai-India 1 September 2004 Thai-Australia 1 January 2005 Thai-New Zealand 1 July 2005
Source:http://ns.boi.go.th/english/download/news/1844/An OverviewofTAFTA&ThailandsOtherFTAs.pdf
2.8.2 Opportunities of Thailand USA Free Trade Agreement In term of economics found that Thailand does Free Trade Agreement with USA make Thai economic system more efficiency. Trading between Thailand- USA increase especially more exports from Thailand to USA and more investment from USA in Thailand. Thai industry in the part were protected by government has to adapt so in the next long time Thailand can increase power of competition and import raw material industries from USA will get cheap capital cost. The clear benefit from doing Thailand-USA Free Trade Agreement is opening Thai-USA market. USA is the big export market of Thailand; in 2005 the value of Thailand exported goods to USA was 15,000 US dollar or 20% of all exports. The 3 categories of best export goods are textile goods- in the present, import tariff of USA is 20% but in the future import tariff will decrease to 0 %. There are the forecast that exporting textile goods from Thailand to USA will increase to 25-30%.
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Figure 2.12: Textile goods
Reference: http://gis.agr.ku.ac.th/e_learning/texttile/ html/Lesson01/2.html/cotton01.gif Next, agriculture goods will get more opportunities to export to USA if Thailand dose Free Trade Agreement with USA especially shrimp, chicken, and Thai Hom Malee rice which have import tariff 20%. Figure 2.13: Agriculture goods
Reference: http://www.tnews.co.th/html/news/6194/ -53-9-.html#.USdqqh3S7Ck/tnews_1262590 572_5911.jpeg And last, auto parts have high opportunities for export to USA. If USA open Free Trade Agreement to Thailand it mean Thailand will get car market about 200 million cars.
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Figure 2.14: Auto parts
Reference: http://www.thairath.co.th/content/eco/313896 Moreover, there is the benefit of canned tuna export. Thailand get import tariff from USA 6-35% while the countries in South America and other countries dont get import tariff. It make Thailand is adverse in term of canned tuna export. In the past, steel goods and canned pine apple have high import tariff of USA and also there are trade barrier of Thailand export such as Bio Terrorism Law. So this make Thailand is difficult to export Thai food and USA also has Farm Act too. Therefore, if Thailand does Free Trade Agreement with USA those problems will be solved and Thailand will export more goods to USA.
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2.9 Watching Back to Thailand-USA Economic for five years, both of opportunity and barrier Table 2.7: The Trading between Thailand USA Total trading Value Proportion % 2005 25,748.3 13.3 13.5 2006 29,037.5 11.2 13.1 2007 28,689.1 9.8 -1.2 2008 31,665.5 8.9 9.5 2009 25,034.8 8.7 -21.0 2010 30,875.7 8.2 23.3 2011 35,235.9 7.7 14.1 * Value: Million Dollars, ** % = % of change Year Export Value 17,064.4 19,449.6 19,194.8 20,274.5 16,661.6 20,200.4 21,857.9 % 10.3 14.4 -1.3 4.4 -17.8 21.2 8.2 Import Value % 8,683.9 20.5 9,587.9 10.4 9,494.4 -0.9 11,391.0 20.0 8,373.2 -26.7 10,675.3 27.5 13,377.9 25.3 Balance 8,380.5 9,861.7 9,700.4 8,883.5 8,288.3 9,525.2 8.480.0
Reference: Technology and communication, Ministry of commerce with the collaboration of Custom From the table, it can be seen that the trading in 2007 and 2009 was decreased. That is because there was the recession of USA economic in 2007. Also, in 2009, USA got the Hamburger Economic Crisis. It is about the wrong decision management in immovable property credit and taking care of investment banker which caused the liquidity problem and spread to the other sectors. Thats why the trading between Thai and USA decreased. So, these are the obstruction of Thailand. Except these situations, recession economic in 2007 and Hamburger Economic Crisis in 2009, the trading of Thailand and USA is increasing more and more. According to Economic and Strategic Analysis Center of TISCO (2012), it analyzed that the USAs Economic in 2013 has tend to be recover from consuming and investing which got the support from the Quantitative Easing: QE3 of the Federal Research. So, if there is no any economic crisis, no natural disaster or any policy that against the trading between Thai-USA, the graph of trading would be rising up more.
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2.10 The effect of trading between Thailand and USA 2.10.1 Exports between Thailand and USA Thailand is an important trading partner and ally of the United States, with treaty basis to the relationship dating back to the establishment of diplomatic ties in 1833 through the original Treaty of Amity and Commerce. Under a Trade and Investment Framework Agreement (TIFA) signed in 2002, U.S. and Thai officials engage on trade and investment issues such as intellectual property rights, customs issues, the WTO Doha negotiations, our APEC and ASEAN agendas, and Thailands interest in the Trans-Pacific Partnership Agreement (TPP). 2.10.2 U.S.-Thailand Trade Facts U.S. goods and services trade with Thailand totaled $40 billion in 2011. Exports totaled $13 billion; Imports totaled $27 billion. The U.S. goods and services trade deficit with Thailand was $14 billion in 2011. Thailand is currently our 27th largest goods trading partner with $35.7 billion in total (two ways) goods trade during 2011. Goods exports totaled $10.9 billion; Goods imports totaled $24.8 billion. The U.S. goods trade deficit with Thailand was $13.9 billion in 2011. Trade in services with Thailand (exports and imports) totaled $4.1 billion in 2011. Services exports were $2.2 billion; Services imports were $1.9 billion. The U.S. services trade surplus with Thailand was $291 million in 2011. 2.10.2.1 Exports Thailand is the 27th largest export destination for the United States. U.S. goods exports to Thailand in 2011 were $10.9 billion, up 21.4% ($1.9 billion) from 2010, and up 64% from 2000. The top export categories (2-digit HS) in 2011 were: Electrical Machinery ($2.1 billion), Precious Stones (gold) ($1.5 billion), Machinery ($1.3 billion), Optic and Medical ($569 million), and Aircraft ($403 million). Figure 2.15: Electrical Machinery
Reference: http://www.trade2cn.com/upload/2008/ 26343466/32711.jpeg
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Figure 2.16: Precious Stones
Reference: http://blog.getgoldcash.com/wp-content/ uploads/2011/07/Sell-semi-precious-stones.jpeg Figure 2.17: Machinery
Reference: http://www.wstribune.com/wp-content /uploads/2012/09/gears-industrialmachinery.jpeg U.S. exports of agricultural products to Thailand totaled $1.3 billion in 2011, the 16th largest U.S. Ag export market. Leading categories include: cotton ($402 million), soybeans ($176 million), wheat ($158 million), feeds and fodders ($104 million), and dairy products ($67 million). U.S. exports of private commercial services* (i.e., excluding military and government) to Thailand were $2.2 billion in 2011, 17.4% ($321 million) more than 2010 and 90% greater than 2000 level. Other private services (business, professional, and technical services) category led U.S. exports in 2011. Figure 2.18: Cotton
Reference: http://www.rawrdenim.com/wpcontent/uploads/2011/06/OrganicCo tton.jpeg
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Figure 2.19: Soybeans
Reference: http://www.pixysrubor.com/wp-content/uploads/ 2012/09/Knowledge-soybeans.jpeg
Figure 2.20: Wheat
Reference: http://images.wisegeek.com/starchwheat-flour.jpeg
Figure 2.21: Feeds and Fodders
Reference: http://gravis.org.in/en/drought_relief /Fodder%20bank%20for%20drought %20proofing.jpeg Figure 2.22: Dairy Products
Reference: http://globial.com/globialtalksbusiness/wpcontent/uploads/2013/01/dairy-products.jpeg
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2.10.3 Thailand GDP Growth Rate The Gross Domestic Product (GDP) in Thailand expanded 1.20 percent in the third quarter of 2012 over the previous quarter. GDP Growth Rate in Thailand is reported by the Office of the National Economic and Social Development Board . Historically, from 1993 until 2012, Thailand GDP Growth Rate averaged 1.0 Percent reaching an all time high of 11.3 Percent in March of 2012 and a record low of -10.8 Percent in December of 2011. The economy of Thailand is an urgent economy which is heavily export-dependent, with exports accounting for more than two thirds of gross domestic product (GDP). However, overall economic growth has fallen sharply in 2008 and 2009 as global downturn and persistent political crisis stalled infrastructure mega-projects, eroded investor and consumer confidence. Figure 2.23: Thailand GDP Growth Rate
Reference: http://www.tradingeconomics.com/thailand/gdp-growth Conclusion: Thailand GDP Growth Rate GDP of Thailand increase 1.20% in third quarter of 2012. GDP Growth Rate in Thailand from 1993 until 2012, it had Growth Rate averaged 1.0% obtain an the higher at 11.3% in March of 2012 and lower at -10.8 % in December of 2011. The economy of Thailand is mainly export-dependent. This exports more than two thirds of GDP. That all data reported by the Office of the National Economic and Social Development Board.
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2.10.4 USA GDP Growth Rate The Gross Domestic Product (GDP) in the United States expanded 2.70% in the third quarter of 2012 over the previous quarter. GDP Growth Rate in the United States is reported by the Bureau of Economic Analysis. Historically, from 1947 until 2012, the United States GDP Growth Rate averaged 3.2% reaching an all time high of 17.2% in March of 1950 and a record low of -10.4% in March of 1958. The United States has one of the most diversified and most technologically advanced economies in the world. Finance, insurance, real estate, rental, leasing, health care, social assistance, professional, business and educational services account for more than 40% of GDP. Retail and wholesale trade creates another 12% of the wealth. Government related services fuel 13% of GDP. Utilities, transportation and warehousing and information account for 10% of the GDP. Manufacturing, mining, and construction constitute 17% of the output. Figure 2.24: USA GDP Growth Rate
Reference: http://www.tradingeconomics.com/united-states/gdp-growth Conclusion: USA GDP Growth Rate GDP of the United States is increase 2.70% in the third quarter of 2012. GDP Growth Rate in the United States from 1947 until 2012, it had Growth Rate averaged 3.2% obtain an the higher at 17.2% in March of 1950 and lower -10.4% in March of 1958. The United States has Finance, insurance, health care, business and educational services more than 40% of GDP. Government related services fuel 13% of GDP. Utilities, transportation and warehousing and information account for 10% of the GDP. That all date report by the Bureau of Economic Analysis.
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2.10.5 Market Opportunities Thailands economic growth has created opportunities for U.S. companies in a number of infrastructure sectors including electrical power, telecommunications, and renewable energy. Thai consumers are creating opportunities for new sales of U.S. medical products, cosmetics, automotive accessories, food supplements and educational services. Thailand also continues to look for U.S. suppliers of defense equipment, broadcast equipment, food processing and packaging equipment, and environmental technology. The Thai government is focusing resources on the development of its transportation network, especially train and high speed train projects as well as ongoing infrastructure projects, including the expansion of the Bangkok sky train and subway systems. U.S. firms engaged in these sectors will find opportunities for success. 2.10.6 Market Challenges Thailands businesses and consumers are extremely price-conscious, often favoring lower prices over product quality or other benefits. Exporters with products that are competitive for reasons other than price should plan to work with their local partner to undertake an extensive marketing strategy. While Thailands average applied MFN tariff rate is 11 percent, the highest tariff rates apply to imports competing with locally produced goods, often leading to even further price pressures for U.S. exporters hoping to succeed in the market. Furthermore, Thailand has preferential trade agreements with such countries as Japan, Australia, New Zealand, China and India. U.S. firms with direct competitors from those countries could face additional price pressures. Corruption and lack of transparency in government procurement tenders, as well as widespread piracy of intellectual property rights, are still major concerns for U.S. companies.
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2.11 The Negotiation that occur between Thailand and USA include with benefit and impact 2.11.1 The Negotiation between Thailand and USA Nowadays, the economic crisis affected to others countries in the world. About Thailand, even it does not affected too much but the signal that should be concern is the export of Thailand that has decrease. This affect to the economic and people more than as expect. Enterprise for ASEAN Initiative (EAI) is the new policy of Bush that was announced in APEC, Mexico in 2002. This is like the opening of negotiation FTA between USA and other countries. It was begun from USA-Singapore (Finished already). Next country is Thailand. When both of countries want to negotiate together, USA will almost specify the conditions because Thailand is the one who want to trade with USA more than USA wants. The example of those conditions are Thailand must be the member of WTO first, Thailand need to do Trade and Investment Framework Agreement (TIFA) or the contract that talks about doing commercial and investment with USA first. Thai started TIFA in 2002. When that was finished, Thailand and USA started to negotiate, first time in 2004. For the latest negotiate was happen in Chiang Mai but there is still no conclusion about the topics of negotiation. However, when there was dissolved parliament in 2005 and Coup detat in September 19, 2006. The negotiation of FTA between Thailand and USA was stuck since that time. About the topic that is in the negotiation, USA offers that FTA between Thailand and USA should be FTA Plus. FTA Plus is something that is more than to be free open for the trading; it would be like Across the Board, to be free open for everything. USA refers that the negotiation between Singapore, Mexico and Chili were all Across the board. USA want the benefit of tax, investment, the buying and selling of government, intellectual property, the service, standardize of labor and environment from doing FTA with Thailand. Almost, Thailand will concern on exporting product; as the past time there are many threats. 1.) Tuna Canneds export, USA decrease tax for South America more than Thailand. When Thailand got higher tax, Thai tunas canned is more expensive. So, Thais cannot competitive to others. 2.) There is a Farm act which is the law that supports money to USA agriculturist, one thousand billion Dollars. So, Thai agriculturist products cannot competitive to others. 3.) There is a Bio-terrorism Law, happened after 9-11. That is because USA is very scared of the terrorists. So, they are very strict on checking products, have more steps. So, it will have more cost on sending products to USA. However, the most things that Thailand is concern about are to decreasing tax especially the agricultural products, such as, shrimp, Thai Jasmine Rice which is about 20%. If it can be non-tax, Thai will get a big market for textile as private sectors told that Thailand can get more sale about 25-30%.
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2.11.2 The drawback of FTA between Thailand and USA 2.11.2.1 About trading products Thailand is 18th trading country of USA and USA hopes that FTA can help to expand the exporting product in Thailand by let Thailand decrease the tax of products and also decrease the treat, too. From the number of USAs government, it tells that the agricultural products of USA got the problems from importing product of Thailand, about 35%. Moreover, Thailand has high tax of importing vehicle and parts of vehicle, high as 80%. So, to do FTA with USA can affected in the negative way of Thailands agricultural products and Thailands vehicle industry. Reference: mulrickillion.blogspot.com/free trade.jpeg 2.11.2.2 About investment USA thinks that to do FTA with Thailand and USA can protect USA from investing of USA in Thailand. About the investment of USA in Thailand, it is about 20,000 million Dollars. USA will use FTA under the treaty of investment with USA which gives the right to USA as they can investment as much as Thais. Nowadays, there are about 1,000 USA companies that use this right to do business in Thailand. In addition, USA wants to pressure Thailand to adjust anything that becomes treats to USAs investor in Thailand. However, Thailand wants to adjust or cancel the treaty with USA. Thailand refers that this treaty against to MFN of WTO. Also, Thailand get pressure from other countries that come to investment in Thailand as USA. 2.11.2.3 The opportunity of doing FTA between Thailand and USA According to the basic economics can tell that doing this can help Thailand economy be more efficiency. The trading between Thailand and USA will be increase as well, especially; the export product of Thailand will be increase as well. Moreover, the investment from USA will be increase, too. In the past, Thailand industry ever got the support from the government which we need to adapt. In a long time, there will be high competitions and the business that imports raw material from USA will get low cost because to import these is cheaper. Another opportunity is the opportunity of the strategic between Thailand and USA. Thailand did not want to do FTA with USA because we want only to do the exporting. However, FTA will make Thailand be as alliance, the partner of economy and the strategic with USA. It must accept that USA is the most great power number one in the world. So, to use FTA, it makes Thailand get close with USA as to get many opportunities, both in political, security, and economy. Figure 2.25: Meeting Free Trading
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To sum up, the best opportunity of Thailand from doing FTA with USA is to open the USA market for Thais products. USA is the biggest market for Thailand, as in 2005, Thailand has export about 15,000 million Dollar or about 20% of all export. In the negotiation of FTA between Thailand and USA, each country got the different advantages. 2.11.3 Affection of trading between Thailand and USA 2.11.3.1 Affect to agriculture USA is the important country which is the partner to trading agricultural product with Thailand but it also has the barrier such as set quota for Thais sugar export, and set the Application of Sanitary and Phytosantary Measures. So, it impact to Thais fruit, vegetable, and sea food export. In 2001, USA has detains Thai export about 1,340 times because Thailand has the problem with shrimp and chicken export to USA. However, agreement of free trade between Thailand and USA help Thailand increase sale volume and expand the economic growth. It gives the advantage to consumer and the manufacture that use agriculture product as raw material but it impacts to many agriculturists who produce the product similar to USA export product such as chicken. 2.11.3.2 Affect to automotive industry Automotive and spares industry is the main industry which use to develop Thai economic because it always has many industry support from the foreigner and Thailand policy. Automotive industry can separate as 3 parts; there are assembly, spare parts and components, and motorcycle. The free trade agreement between Thailand and USA gives the benefit to Thailand by increase the investment of automotive industry. Also, Thailand need to adjust the product to meet the USA market needs. 2.11.3.3 Affect to service of telecommunication and electronic ecommerce 2.11.3.3.1 Telecommunication The market of telecommunication in Thailand has competitive as effectiveness because it has many problems such as the government rule to control is no meet the standard, the condition for concession between government and private sector, and the customers complaint. Thailand will receive the benefit as 2 aspects from agreement with USA; there are
The telecommunication in Thailand will increase by USA investor. And they will have indirect competitive as the service for sale too. The telecommunication will have high standard to control by the requirement of transparency and have the way to check.
However, Thailand needs to modify law which relates with telecommunication such as prevent the right of Thai investor. 45
2.11.3.3.2 Electronic ecommerce The agreement of electronic ecommerce has divided to two parts. There are agreement of product and service. In the product agreement, the digital product which import to Thailand will collect tax as the value of the packaging material. And the digital product which shipping by electronic network will exempts from the customs duty. So, Thailand will have low income as 0.3 percent. And it does not effect to government treasury as much. 2.11.3.4 Affect to financial management The cross-border transaction will effect to the risk of Thai financial system. The government should use trade liberalization as positive-list approach because the financial management always has new innovation. Then it is not appropriate with negative-list approach. At the new services, it will have risk to Thai economic and it is not relates with model scheme of develop the financial system by Bank of Thailand. 2.11.3.5 The protection of intellectual property The agreement makes Thailand increase the standard for protection of intellectual property as USA standard. It effects to protection of intellectual property system that have high level more than the development of country. So, Thailand will lack of flexibility to set the intellectual property policy that relate to education, public health, and agricultural such as provide the textbook, low price program for educational institution, and low price of medicine for patient. Thailand can gain less benefit from the agreement. And Thailand has bear high social costs such as the cost for adjust law and law enforcement which relate to the agreement, and cost of product and service for right to use intellectual property. 2.11.3.6 Conclusion USA is the important export market from Thailand but Thais product has decrease market segment as steadily. The free trade agreement between Thailand and USA aims Thailand to increase import sale to USA and stimulate Thais economic growth. Moreover, almost product of both countries has support to each other and need to modify the product to respond the customer in each market too such as reduce production cost, reform the quality of the product, and reduce the time to deliver the product. While the manufacturer of agriculture product can exports the products to USA when the product has high quality and security. Thailand can negotiate with USA to dismiss the trading barrier which is not the tariff. However, some manufacture will receive the impact to export the product to USA for example; agriculture product as soybean, corn and dairy product because it has high competition.
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Furthermore, after Thailand make free trade agreement with USA, Thailand has more investment between the countries. It has the advantage to employment, economic growth, and Thais economy can allocate the resource as more efficiently. On the other hand, Thailand must attend short-term investment as speculation, flexibility to set the policy in the country, and mechanism for dispute resolution. All of above is the sensitive topic. At trade of service part, the benefit that Thailand can gain from export will not increase as much but Thailand will receive the investment benefit from USA and high completion in some service. The benefit which receive form service part is difficult to get more than benefit from product because Thailand must modify the rule to make high standard of service. Free trade agreement between Thailand and USA relates with many sensitive issues for example protection of intellectual property. It makes Thailand adjust the law to protect the intellectual property as USA standard. So, Thailand will lack of flexibility to set the develop countries policy, have more cost of economic, and have new social from monopoly right of protection intellectual property. Moreover, Thailand should be careful to give the special right to UAS more than other countries. It will establish risk to monopoly by USA investor. If the investor in Thailand is not strong, Thailand will difficultly to negotiate about trading with other trader in the future too. 2.12 The relationship between WTO and Thailand 2.12.1 Introduction The Kingdom of Thailand has been a WTO member since January 1995, and has made steady progress in lately years about trade liberalization, however restructuring it is public department and strengthening it is financial system. Thailand has already attained the halfway point in fulfilling it is trade and investment liberalization targets under the Bogor Declaration between Asia-Pacific states. This commitment Purposed to reduce barriers to trade and investment by promoting the free flow of goods, services and capital between Asian-Pacific economies (for developed and developing countries by the years 2010 and 2020, respectively). The Thai government is looking for a "dual track" come near of strengthening the domestic economy while integrating into the global economy through export growth and market exchanging into high-valued products. Thailand is also supporting for a network of double-sided preferential trading arrangements, particularly within the Asian/South Pacific region, including the establishment of an ASEAN-China Free Trade Area within ten years, the formation of an East Asia Free Trade Area between ASEAN members, China, Japan, and Korea (ASEAN plus Three), and an ASEAN-Japan Economic Partnership.
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The United States, Thailand's largest trading partner (Thailand ranks 18th between U.S. trading partners), is currently in negotiations with the Thai government for a free-trade agreement that would expand market and investment access between the countries. U.S. investors are already exempt from barriers to investment due to a 1966 treaty. 2.12.2 Agriculture Agriculture accounts for nearly half of employment in Thailand and 20% of exports, though it only makes up about 9% of GDP. Within the WTO, Thailand has delineated a set of specific demands for freer global farm trade, geared about reducing high import tariffs on farm products and export subsidies that twist global farm prices. It has called for the maximum final import duty rate to be set at 25% and for the complete expulsion of export subsidies by developed countries within three years. However, Thailand does have high levels of tariff protection against imports for certain agricultural products, averaging 26% agricultural tariff protection, compared to only 13% overall tariffs on imports. Figure 2.26: Agriculture in countryside of Thailand
Reference: http://www.123rf.com/photo_15753952_a griculture-in-countryside-of-thailand.html/ 15753952-agriculture-in-countryside-ofthailand.jpeg
The secretary-general of Thailand's Joint WTO Committee has supported developing countries to form alliances to strengthen their bargaining positions, and the Thai private sector has engaged in talks with neighboring countries such as Indonesia, Malaysia, China, the Philippines and Vietnam on the topic of agriculture issues. Thailand is a member of the Cairns Group of 17 agricultural exporting countries pushing for deep cuts in tax rates and the elimination of all export supporting money. With the continued advocacy of the newly cohesive G-20 group of developing countries at the Cancun ministerial meetings in November 2004, the elimination of developed country export supporting money will continue to be an important problem in the Doha Round. Thailand recently joined Australia and Brazil in challenging European export supporting money on sugar, which could have important effect on both European and American policies of sugar subsidization, which developing countries claim is keeping the price of sugar depressed by up to 40%. 2.12.3 Trade-Related Intellectual Property Right Along with Brazil and India, Thailand is one of the few developing countries that have the pharmaceutical sector capacity to produce generic drugs for pandemic diseases like HIV/AIDS, which can be exported to other developing countries who cannot afford patented drug prices. With its generic production capability, Thailand supplies antiretroviral AIDS 48
drugs to 10% of its HIV-positive population, a much higher figure than other Asian countries facing the HIV/AIDS pandemic, and is currently exporting drugs to Cambodia, Laos, and Burma, countries that do not have the capacity to produce their own generic drugs. However, many Thai HIV/AIDS activists, as well as international groups such as Doctors without Borders are afraid that the upcoming free trade agreement with the United States will include much more stringent intellectual property protection provisions, similar to provisions included in recent U.S. agreements with Singapore, Chile, and Morocco, that will put Thailand's generic drug production in jeopardy. Figure2.27: Anti-Retroviral AIDS Drug
Reference: http://blogs.discovery.com/dfh-insider/ 2012/07/index.html/ 6a00d834bf67c 53ef0176168c56f1970c-320wi.jpeg
2.12.4 Food Safety In 2002, EU detect that the animal feed has Chloramphenicol; it cause by the import shrimp which use for produce the animal feed. So, EU needs to verify the chemical residues as carefully and USA be awaked to this trend too. Then USA verifies Thais shrimp as strict. However, Thailand was worry about Chloramphenicol trend because it will effect to shrimp industry. Thailand has revenue for shrimp export. It is the top five in the value of Thai export. Therefore, Thai government announces new law for shrimp farm that must not use Chloramphenicol for prevent the problem and make confidence to the importer. The way to solve Chloramphenicol problem for shrimp industry in Thailand; there are 1. Check for Chloramphenicol import The importer must inform and specify the objective of import to the customs. The customs can check the way, and the quantity to use Chloramphenicol. 2. Separate the animal medicine and human medicine Nowadays, it has a lot of chemical import for produce the medicine and the chemical did not separate the characteristic. Then it difficult to check about Chloramphenicol which use for feed the shrimp. 3. Control the volume of Chloramphenicol for using in farm
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Ministry for Agricultural and Cooperatives control the level for using Chloramphenicol in shrimp farm and determine penalty if the farm use Chloramphenicol to feed the shrimp Giant Tiger prawn. Also, the government must support the machine to detect Chloramphenicol. And the relate sector must publicize the knowledge to the farm. 4. Refrain to import the shrimp The government refrains to import the shrimp because some shrimp will have chemical residue. Those shrimp will impact to Thai production too. Problem about exporting the shrimp to USA USA prosecute and use Anti-Dumping with Thailand since 2003 to present. USA will prosecute CVD (Countervailing Duty) to Thailand. However, Industry of shrimp in Thailand is being look at labor issue. From the report of ministry of foreign affairs and ministry of labor found that Thailand used child labor and enforces labor to working. Then USA put Thailand to Tier 2 watch list state in 2009. The way to solve the problem, Thailand should to advertising about image of shrimp product by focus on labor because USA and EU are emphasize on this topic. Also, Government must seriously to solve the labor problem in the country. Moreover, the part of aquaculture should using proactive to avoid the barriers of trading too. Problem about lean primary market Shrimp product is bunch in old market; there are USA and EU. They begin have the problem about economic crisis then they make the rule and barrier of trading with Thailand. The way to solve the problem, Thailand should try to promote shrimp product to the new market. The public and private sector should cooperate and set the measure for promote and persuade to other countries for find new market which have high potentiality and reduce to lean old primary market. In February 2003, Thailand introduced more strict safety tests on food imports from the EU, Japan and the US, conducted on "a non-discriminatory basis" and "based on scientific evidence." Authorities say that the Kingdom is pursuing world standards for foodsafety testing; not retaliating against any other countries policies, such as the strict testing long encountered by Thai shrimp and poultry exporters in the EU and the US. The tighter measures, however, will first be applied to agricultural goods including fruit, canned products, milk, cheese and butter mainly from the EU and the US, and then followed by inspections of industrial products.
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2.12.5 Investment and Competition WTO director-general and former Thai government official Supachai Panitchpakdi has urged Thailand to get involved in designing a framework for negotiations of multilateral rules for investment and competition. The country has experience in both issues, and it holds a set of domestic regulations that would likely be affected by such rules. However, the Singapore Issues concerning investment and competition proved to be quite contentious at the Cancun Ministerial Meeting, and it is still unclear how much progress will be made, if at all, on these issues during the Doha Round. Thailand officially ceased offering preferential tax incentives through its Board of Investment (BOI) at the end of 2003. However, the privileges, which are offered in the forms of eight-year waivers on corporate taxes, as well as discounts or waivers on machinery import taxes, may still be got by petition for future exemptions on a year-by-year basis. Thus, companies operating in Thailand with these privileges - mostly electronics, electrical appliance and agribusiness firms - would see their tax and tariff exemptions cut off by 2005 at the soonest. Many American companies benefit from these policies, and have invested an estimated $16 billion in Thailand. 2.12.6 Textiles and Clothing Thai exports of textiles and clothing, which account for about 8% of its total exports, estimate increased competition from countries including China and Vietnam after the beginning of the quota-free global trading which will begin on 1 Jan 2005 under the WTO Agreement on Textiles and Clothing (ATC). Many hope that an upcoming free trade deal with the United States will reduce the negative impact of increased competition in textiles. Figure 2.28: Beautiful traditional textiles of Northern Thailand
Reference: http://www.travel-pictures-gallery.com/thailand/chiang-mai/ chiang-mai-0009.html/chiang-mai-0009.jpeg
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2.12.7 Conclusion With an average customs tariff-rate of 27%, Thailand remains a comparatively hightariff country compared with 14% for Malaysia, 11% for Australia, 9% for South Korea, and 4% for the US. In order to bring down trade barriers more rapidly on a concessions basis, it is actively pursuing bilateral free trade arrangements with countries including China, Japan, the United States, Australia, Bahrain, India and Singapore. Faced with increasing competition from China in its leading export sectors of electronics and textiles, Thailand is being forced to diversify its markets and re-examine where its comparative advantages lie. 2.13 Reflection of trading between Thailand and USA This is conclusion about the reflection between great power country and small power country. The relationship of USA and Thailand cover as history, international relationship, and trading between countries. About the history, Thailand and USA contact and building relationship. So, USA can intervene as Thais economic and politic. It conceal in the policy which support strategies in the developing country. However, USA can gain the benefit as give the loan to Thailand; then, USA will get the vote in world stage. It seems as politician can use money to gain the vote. Another to intervene the politic is the world terrorist. USA acts as great power country that would like to suppress agitator. Trading and the export between Thailand an USA is also can reflect to the important situations. To analyze the problem about trading between Thailand and USA, even USA has relationship with Thailand but USA still set the barrier to Thais product such as quality and human right. On the other hand, the problem and measurement that reflects to terrorist fear of USA then it sets the barrier to the non-relationship country and relationship country. After 9/11, USA responses to the every kind of terrorist by determine the barrier in the world stage and colon. Some country be on black list of USA including Thailand as under the World violate copy right topic. This can use to intervene as many topics in Thailand because USA needs to maintain their power as to be number one. The trading between Thailand and USA also has the barriers of trading and exporting for the small power countries because of terrorist, economic problem and capitalism problem. These will always affect to every countries in the world stage as in the same and inferior than Thailand level. However, some countries have the retort or retard the power with USA in trading and international exporting. This can be seen from the other continent or region that assemble as economic to retard the power as to get the balance of power. They will assemble until one day that USA decrease the role and status in the world stage. That can make the war in the future because of the topic in obstruction point of trading and exporting.
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CHAPTER 3 - CONCLUSION
The trading between Thailand and USA shows the role of greater power country as USA have influence to developing country as Thailand. The less power country will adverse on trade agreement because the greater power country set many barriers such as quota, tariff, human right, quality of product, and labor condition to control the sales volume. Then all of these contents can make the less power country have scandal about the condition. Therefore, international trading between Thailand and USA effects to role of the power, economic system, Neo-colonialism, and security measure. First one, about the role, effect and the acts of the great powers to the small power as arrive from the reflection of the trading and the problem of exporting product between Thailand and USA. This relates in the topic Great powers in the world history. Second one, we had study about the case study which relates to the lesson. That lesson is Liberalism. It is the theory that effects to the thinking and learning also the investing. This can be say that liberalism is the origin of capitalism which relates to the topic Economic Dynamism of the world. From these, we can see through the relationship and the important between these two countries in another way, as Neo-colonialism. This based on the fundamental economics of USA who is the representative of the great powers, acts aggressive to Thailand who is the representative of small powers as the role and effective according to the above information. The last one is about the exporting. This can be represents the fear to the influence of the great powers through the role of USA. As after 9/11, USA had rise up the aggressive of their severe even in the indirect way. For an example, to rise up the steps of importing products from the countries that have be the trade partner for a long time, Thailand. This also has the implicit that has already analyzed as the great power who received the attack from the terrorists has the big effect to its own country and also to others as to be insecure in administration, economics and politics in all over the world. Finally, in each point ofthe trading between Thailand and USAterm paper isrelated to the lesson in the classroom such as economic system, globalization, and political. All of the content can transfer to the problem if we do not follow to the circumstances. So, we must be ready to face with each situation to reduce limitation.
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REFERENCES
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REFERENCES - CONTINUED
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International Trading Problem Between Thailand and USA by Big Poop-Pup Double Extra

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

TABLE OF CONTENTS - CONTINUED

TABLE OF CONTENTS - CONTINUED

TABLE OF CONTENTS - CONTINUED

LIST OF TABLES Table Page

LIST OF FIGURES Figure Page

LIST OF FIGURES - CONTINUED Figure Page

1.4 Gantt Chart

CHAPTER 2 - INTERNATIONAL TRADING BETWEEN THAILAND AND USA

Reference: http://seekingalpha.com/article/241818-tradebalance-the-u-s-is-a-net-exporter-of-solarproducts/ saupload_trade_balance.jpeg

Figure 2.3: U.S. Thailand Relations

Figure 2.6: 4th ASEAN-U.S. LEADERS MEETING

Figure 2.8: Black tiger prawn

Reference: http://www.oknation.net/blog/print. php?id=848290/615609330.jpeg

Reference: http://ambkristie.us/page/10/tumblr_lqubfqhv60 1qg5vj3o1_500.jpeg

Figure 2.12: Textile goods

Figure 2.14: Auto parts

Reference: http://www.trade2cn.com/upload/2008/ 26343466/32711.jpeg

Figure 2.16: Precious Stones

Reference: http://blog.getgoldcash.com/wp-content/ uploads/2011/07/Sell-semi-precious-stones.jpeg Figure 2.17: Machinery

Reference: http://www.rawrdenim.com/wpcontent/uploads/2011/06/OrganicCo tton.jpeg

Figure 2.19: Soybeans

Reference: http://www.pixysrubor.com/wp-content/uploads/ 2012/09/Knowledge-soybeans.jpeg

Figure 2.20: Wheat

Figure 2.21: Feeds and Fodders

Reference: http://gravis.org.in/en/drought_relief /Fodder%20bank%20for%20drought %20proofing.jpeg Figure 2.22: Dairy Products

Reference: http://www.123rf.com/photo_15753952_a griculture-in-countryside-of-thailand.html/ 15753952-agriculture-in-countryside-ofthailand.jpeg

Reference: http://blogs.discovery.com/dfh-insider/ 2012/07/index.html/ 6a00d834bf67c 53ef0176168c56f1970c-320wi.jpeg

Reference: http://www.travel-pictures-gallery.com/thailand/chiang-mai/ chiang-mai-0009.html/chiang-mai-0009.jpeg

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