Ministries debating benefits and drawbacks of TPP

Against the backdrop of Prime Minister Prayut Chan-o-cha’s participation in the ASEAN summit with President Barack Obama, several Thai government ministries were conducting studies and holding internal debates last week on whether or not Thailand should join the United States-led Trans-Pacific Partnership (TPP) trade group, examining the pros and cons.

Four countries attending the summit between the U.S. and the Association of Southeast Asian Nations (ASEAN) have already signed on the to 12-member TPP: Brunei, Malaysia, Singapore and Viet Nam. Thailand, along with the Philippines and Indonesia are considering applying for membership. U.S. Ambassador to Thailand Glyn Davies recently urged Thailand to join the TPP, and other free-trade groups, to help the Kingdom revive its trade and economic growth.

Both the Finance and Commerce Ministries said last week that they believe joining the pact will boost Thailand’s gross domestic product (GDP) growth along with trade. A study by the Fiscal Policy Office within the Ministry of Finance supported that view. The Ministry of Commerce, meanwhile, commissioned a similar study by the Panyapiwat Institute of Technology that posited TPP membership would raise Thailand’s GDP by 0.77 percent.

Should Indonesia and the Philippines also join, that could result in Thailand’s GDP rising by 1.06 percent, according to the study.

Kris Chinavicharana, director general of the Fiscal Policy Office, said that Thailand already runs trade surpluses with nine of the 12 TPP countries, and joining would provide greater opportunities for Thailand to export even more of its products and services to those markets. Brunei, Japan and Malaysia are the only TPP countries with which Thailand has a trade deficit.

Deputy Prime Minister Somkid Jatusripitak, who oversees the economic ministries, has come out in favor of Thailand joining the TPP. Prime Minister Prayut, however, is undecided on the matter at this point. The Prime Minister has noted that some ministries have concerns about the effects of the TPP’s provisions, and some groups in society are adamantly opposed to Thailand joining.

Among those voicing concerns have been the Ministry of Public Health and health advocacy civil society groups who fear that the TPP’s intellectual property requirements will prevent Thailand from producing generic versions of much needed but extremely expensive pharmaceuticals.

Finance Minister Apisak Tantivorawong acknowledged those concerns and said the government would have to devise measures to shield the public and the local pharmaceutical industry from negative effects.

Several farmers groups also voiced apprehension about TPP membership.

Surachai Sudhitham, president of the National Swine Raisers Association, submitted a letter to the Ministry of Commerce last week on behalf of 10 livestock associations requested the ministry provide details on the anticipated negative effects of the TPP on their sector. He said that labor and environmental regulations in the U.S. and Canada could constitute an indirect trade barrier under the agreement.