Thailand’s commercial interests under siege by FTA talks and Shin Corp sale?

Updated On: Feb 10, 2006

Karun Kittisataporn (permanent secretary of the Commerce Ministry) has been named the new chief negotiator for the Thailand-US free trade talks, replacing Nitya Pibulsonggram who resigned last month,  Yet the outlook for the talks remains uncertain. 

Although Mr Karun is expected to be tougher on the US, Vitoon Lianchamroon of the environmental group Biothai, believes the former’s negotiating power will be overridden by Prime Minister Thaksin’s decisions, to possible detriment of Thailand’s interests.

As it stands, FTA critics fear that the government's proposed amendment of Thai patent law in response to US' demands for intellectual property (IP) rights in the patenting of drugs and living organisms in Thailand will lead to US firms manipulating Thai resources.

The Bangkok Post reported Buntoon Srethasirote, a member of FTA Watch, a civic group monitoring the Thai-US FTA agreement, as saying ‘that US demands for IP rights protection in Thailandwere much more ''extreme'' than the requirements Washingtonset for its other FTA partners…’ Jiraporn Limpananont, ofChulalongkornUniversity's Social Pharmacy Research Unit, has also called the US’ proposal “exploitative” and “greedy”, inconsistent with the proper treatment of a “close ally”. Ms. Jirapom added that “if the government submitted to Washington's demands, the public services system, including the 30-baht health care scheme, would completely collapse.”

The Thai Insurance industry has also been reported in the Nation (Thai Press Reports, 7 Feb) that it would need a decade to prepare for foreign competition. Sara Lamsan, the association’s secretary has warned that both consumers and insurers would suffer if the government rush into opening up the insurance market to foreign entrants. 

All these add to the latest fears emanating from the Shin Corp saga. As a result of the sale, Thai AirAsia’s foreign ownership exceeds the limit set by the Department of Civil Aviation. To have air privileges as a “Thai” carrier, it must be owned at least 51% by a Thai company and a maximum of 49% by foreign entities. This ratio has since been exceeded as the original percentage was 51% Shin Corp-owned with Malaysian budget carrier AirAsia holding the remaining 49%.

Besides concerns about Thailand’s commercial aviation rights, other Thai carriers are afraid that Temasek, which owns Singapore Airlines, could force them out of business through unfair competition like fare dumping. To prevent the loss of aviation rights, Thai AirAsia chief executive officer Tassapon Bijleveld has already said that Thai AirAsia will find a new Thai partner to resolve the shareholding problem.

The Thai AirAsia issue will increase the flak Singapore has been receiving. Anusorn Srikaew, rector of Rangsit University, has said, “Thai people are capable of buying back Shin shares sold to Temasek and should unite in boycotting Singapore.” Thepchai Yong, group editor of Nation Multimedia Group, has expressed fears that the media control will be tightened as Thai media companies have been included in the Shin Corp sale.

Amid Thaksin’s apparent rising unpopularity because of all these actions, it is doubly surprising that in the Assumption University’s Abac Poll, 60% of the 1,377 surveyed feel that the Prime Minister should remain in office.  


Draft amendment to patent law a 'sell-out', Bangkok Post, 8 February 2006

Karun takes over as new chief negotiator, Bangkok Post, 8 February 2006

Open skies and foreign ownership, Bangkok Post, 8 February 2006

Thai AirAsia seeks to boost domestic stake AirAsia woes as Shin becomes alien, Bangkok Post, 8 February 2006

New Tie-up for AirAsia, The Nation, 8 February 2006

Call to boycott AIS, banks tied to S’pore, The Nation, 8 February 2006

PM’s support firms but royal vow raises eyebrows: Abac Poll, The Nation, 8 February 2006

Thailand’s Insurance Sector Firms not Ready for Free Trade, Thai Press Reports, 7 February 2006