Australia predicts big gains in Thailand trade pact

By GREG ANSLEY

CANBERRA - Australia is pushing ahead with a plan to secure bilateral trade deals, a joint study predicting two-way gains of A$58 billion ($69.68 billion) from a free trade pact with Thailand.

The study is part of consultations to decide if formal negotiations should begin.

But it adds weight to Canberra's move to shift away from a reliance on World Trade Organisation negotiations to a policy where struggling multilateral liberalisation will be backed by Government-to-Government deals.

Although slower off the mark than New Zealand, which first signed a free trade deal with Singapore, Australia has been making up for lost time and now has more prospects on the table.

A free trade agreement with Singapore, expected to boost Australia's financial and educational service sectors by up to A$70 million a year, is due to be signed this year.

Australia is also more advanced than New Zealand in discussions with the United States and is optimistic about negotiations with Thailand. During Japanese Prime Minister Junichiro Koizumi's visit this month Australia agreed to framework talks on free trade with Tokyo.

New Zealand's progress is largely confined to the glacial pace of negotiations with Hong Kong, overtures to Chile, and, with Australia, attempts to link CER to the Asian Free Trade Area and South America's Mercosur pact.

The joint Australian-Thai scoping study said a deal between the two would increase Australia's GDP by A$12 billion, and Thailand's by A$46 billion, over 20 years.

Australian exports to Thailand of dairy and other agricultural products, pharmaceutical goods, aluminium, and large passenger vehicles were likely to increase. Banks and professional services would gain with freedom to operate in Thailand.

Agricultural sales would gain from lower tariffs and greater access to a market of 19 million consumers.

The study saw further potential for increased sales of Australian products to the Thai food processing industry, and greater Australian investment in Thai agriculture.

Other sectors to gain would be textiles and clothing, education and tourism, with only modest adjustment costs for industries in both countries.

The study recommended that any agreement cover trade in all goods and services.

It suggested liberalising investment, further moves to harmonise standards and to resolve quarantine issues.

The study recommended considering anti-dumping measures, the development of electronic commerce, government procurement and co-operation on intellectual property.