Thailand keen to cut taxes in RCEP

Thailand seeks to advance the Regional Comprehensive Economic Partnership (RCEP) talks in Malaysia this month with a proposal that 65% of products be tax-free next year.

Deputy Commerce Minister Apiradi Tantraporn said the RCEP meeting scheduled for July 13 would also see Thailand urge members to waive tax on 85% of total products in 10 years.

The RCEP is an initiative launched in November 2012 to promote free trade between the 10 Asean members and six partners: Australia, China, India, Japan, New Zealand and South Korea.

The RCEP, for which negotiations are scheduled to conclude later this year, is the largest regional trading bloc in the world, accounting for 45% of the world population, with a combined GDP of $21.4 trillion.

Thailand exported $127 billion worth of goods to RCEP countries in 2014, making up 56% of the country’s overall export values. Key exports were automobiles and auto parts, plastic pellets, chemicals, computers and parts, and rubber and rubber products. Imports totalled $133 billion, representing 58% of Thailand’s import values.

A recent Thammasat University study showed RCEP would benefit products in seven sectors: food processing, textiles/garments, rubber, chemicals, petrochemicals, jewellery and electronics. The pact could also attract Japanese investors to Asean rather than China, as the two sides are mired in conflicts.

On the downside, RCEP could have a negative impact on Thai-made cars, electric appliances and steel products, which would face fierce competition from rival Chinese goods.

“RCEP is a key market that offers great opportunities to Thai exporters and businesses, not only for trade but also investment,” Ms Apiradi said. “The agreement also aims at cutting what are deemed as trade obstacles among members.”

In a separate development, she said escalating protests at the Thai honorary consulate in Istanbul, where locals were angry about the way Uighur refugees are being treated in Thailand, was unlikely to affect Thai-Turkey FTA talks.

However, the talks may be postponed from August as Turkey installs its new government, she said.