Expected market access gains in the US together with competition for FDI have driven the proposed Thai-US FTA. But the small margins of preference in tariffs Thailand may obtain will not make a significant difference in its market access in the US, especially as the US is simultaneously negotiating comparable FTAs with several of Thailand’s competitors within and outside the region and thus existing MNC production configurations are unlikely to be affected. Moreover, the presence of non-tariff measures like TBT and SPS measures applied by the US in its strategic sectors would not only hinder Thailand’s market access, but would also lead to a further increase in its technology and capital intensive imports. On the other hand, given the U.S. surplus production in key agricultural products and the impact of liberalised imports on small and medium industries that produce for the domestic and export markets, the costs of domestic production lost to increased imports from the US can become very high for Thailand.



October 29, 2006.