What Can We Expect from a Trade Deal with Japan?

Much has been said about the pros and cons of the bilateral free-trade agreements (FTAs) the government has entered into or is in the process of negotiating with a number of partners, Japan among them.

That Japan is Thailand’s natural choice – and vice versa – for the Economic Partnership Agreement (EPA) should come as no surprise given the long history of cordial ties and excellent cooperation at all levels between the two countries.

Today Japan is Thailand’s top trade partner and the country’s main source of capital inflows. Bilateral trade between the countries amounted to US$29.46 billion (Bt1.22 trillion) in 2003 alone. Japan is also Thailand’s top foreign investor.

Last year, capital flows from Japan amounted to Bt28.34 billion, or around 44 per cent of all of Thailand’s capital inflows. The Japanese automobile industry uses Thailand for much of its Asian production.

Meanwhile, more than one million Japanese tourists visit Thailand each year.

It is possible to imagine some major opportunities that could be brought about by the Japan-Thailand Economic Partnership Agreement (JTEPA).

The fourth round of the JTEPA negotiations is set to take place in Japan on September 13-15, and the two sides are trying their best to create an even “bigger cake” of mutual benefit and opportunity.

Their aim is to make JTEPA a high-level agreement – something much more meaningful than just an FTA.

In addition to the liberalisation of trade in goods and services, JTEPA looks set to cover investment, intellectual property and cooperation in various fields, including agriculture, mutual recognition of product standards, the promotion of small and medium enterprises, information and communications technology, tourism and education.

While it is still too early to say how each side will benefit from the JTEPA given that the negotiations are ongoing, from Thailand’s standpoint, the JTEPA should lead to more business opportunities for Thai companies and greater access for goods from Thailand – industrial and agricultural alike – in the Japanese market. It should also enhance cooperation to move our products to a higher standard to meet the demands of Japan and other countries.

Now that Thailand’s FTA with Australia and the early-harvest agreement with China have put the government on the spot from certain agricultural groups, the JTEPA poses a challenge, yes, but it is also an opportunity for our agricultural sector to find out how we can work with Japanese farmers to yield more long-term benefits for farmers in both countries.

Like all negotiations, there are certain areas that are more sensitive than others, and more often than not one side does indeed stand to gain more than the other.

The Japanese are clearly determined to advance their interests in investment and market access for goods and services.

While it is true that this kind of expansion of investment and trade is likely to create more job opportunities and better earnings for Thai people, it is also about time that we started talking about a true “partnership” in terms of both sides helping each other to grow, and not merely for the sake of profit maximisation as is often the case in the business world.

For the JTEPA to be a high-quality agreement that brings about mutual benefits for both peoples, both sides must rise above their various vested interests and approach the negotiations with an open mind, aware that, in the truest sense of a partnership, the benefits must be mutual.

Ways can be – and should be – found for partners both partners to gain, even if they are at different stages of development.

The common end goal should be to promote a better quality of life for farmers, workers, business both big and small and the largest but most under-represented group – the consumers. In both countries.

This challenge and the bureaucratic mindset remain to be overcome. It also remains to be seen how Japan will seize the opportunity to prove, through the JTEPA, her readiness to join Thailand