Free-trade deal focuses on Thailand

New Zealanders doing business in Thailand are among the principal beneficiaries of a free-trade deal unveiled early this morning.

A raft of regulations controlling their movements within Thailand will be eased and multiple-visit visas introduced. Those working as managers, executives or specialists will be able to have their work permits extended for up to five years and their spouses will be allowed to work.

Prime Minister Helen Clark and Thailand PM Thaksin Shinawatra announced the deal at a meeting on the margins of the Asean Summit in Vientiane, Laos. July 1 next year is the target date for implementation.

The deal is primarily aimed at reducing punitive tariffs so that New Zealand and Thai exporters can gain better access to each others markets.

Among the key measures:

* Thailand will eliminate tariffs and quotas on 52 per cent of imports from New Zealand - now only 4 per cent of such imports receive duty free access. The move is worth about $15 million to New Zealand. Remaining tariffs will be progressively reduced.

* Key sectors to benefit from the tariff reductions are dairy, fruit and vegetables, forestry products, meat, and processed food and beverages.

* Thailand will also remove all tariffs on imports of machinery items from New Zealand by 2010.

* New Zealanders will be allowed to take 100 per cent equity stakes in Thai companies.

In return, New Zealand will immediately eliminate tariffs on a raft of Thai agricultural products, processed food and sporting equipment. By 2010, some 97 per cent of Thailand's present exports to New Zealand will be duty free.

Thai investors will still remain subject to New Zealand's overseas investment screening regime.

Pledges, not binding commitments

New Zealand has opted for non-binding arrangements to cover labour and environmental matters relating to the Thai free trade deal.

The Council of Trade Unions wanted cast-iron commitments to ensure Thai firms did not gain an unfair advantage through exploitative labour or environmental practices.

But what has instead been agreed are merely "Arrangements for Labour and Environment", stopping far short of the binding clauses unions wanted.

Among the pledges: both countries will work to ensure their labour and environmental laws, regulations, policies and practices are in harmony with international obligations; they will not seek to gain advantage by weakening labour or environment laws, nor use them for protectionist purposes.