'TAFTA and the benefits of Open Trade'
Thailand Board of Investment Office, Sydney
Speech
30 April 2009
Thank you. It's a pleasure to be here, and I'd like to thank our distinguished guests and all of you for making time to attend.
I'd particularly like to welcome publicly Minister Chanchai to Australia. He is the first minister of the current Thai Government to visit Australia and in view of Thailand's long-standing friendship with Australia he is very welcome.
I'm especially pleased to have the chance to address you today because, amidst the gloomy economic news—news which has a real impact on businesspeople like you—the launch of this seminar and the opening soon of a Thai Board of Investment office in Sydney, is a sign of the confidence the Thai Government has in the role trade and investment can play in stimulating economic growth. Let me assure you that this is a view strongly shared by the Australian Government.
I've also just taken the opportunity to discuss our respective trade priorities in these challenging times with Minister Chanchai. I discussed Australia's strong desire to take forward what's known as the 'inbuilt agenda' in our bilateral FTA, known as the Thailand-Australia Free Trade Agreement, or TAFTA, which dates from 2005 and which has been a success story.
TAFTA has significantly increased bilateral trade and contributed to both nations' economic development.
Thailand in particular has been a major beneficiary. In 2008, following a 21 per cent year-on-year growth, our exports to Thailand stood at $5.3 billion. But our imports from Thailand had grown even faster, to $10.2 billion.
The same is true of services. Our services exports in 2007-08 were worth almost $890 million, also a result of a 21 percent year-on-year growth. By contrast, we imported services from Thailand getting on for twice that figure¹.
Services are very much part of the changing nature of trade, which these days embraces far more than producing and shipping goods.
And in the detail of this services trade you find some impressive statistics, that go to the heart of our people to people exchanges.
Some 650,000 Australians visited Thailand last year, a very large number indeed. Meanwhile, some 85,000 Thais visited Australia and, what is much more significant, there are nearly 20,000 Thai students studying in Australia. Australia is now the preferred destination for Thai students.
Those people-to-people relations are, in the Government's view, a real strategic asset, and they're another reason why TAFTA has been and will remain of strategic advantage to us both.
In addition to the tangible and intangible benefits we get from having so many Thai students in Australia, we're also seeing more business exchanges—which lead to a better understanding of opportunities in new business areas, such as in the energy sector.
I think that TAFTA helped pave the way for regional economic liberalisation; I'm aware that other members of ASEAN are interested in obtaining the market opening gains it created.
TAFTA contains what's called an 'inbuilt agenda' which called for negotiations on further trade liberalisation to start by 1 January 2008.
In our view—and Australia's Minister for Trade has put this view to the Thai Government—those negotiations can and should start now.
We know the new Thai Government, led by Prime Minister Abhisit, has announced its commitment to trade and investment liberalisation, and we welcome that.
Fortunately, we and they agree that, in the current global economic climate, an increased commitment to liberalisation is essential to spur growth.
Thailand is one of many countries that has expressed concern about the prospect of major economies turning inward in these troubled times.
Thailand has nothing to fear from Australia in this regard. And I'd add that commencing mandated negotiations on our bilateral in-built agenda would show real leadership; it would have a strong demonstration effect, not just in the region but also to major trading partners like the United States, Europe, Japan and China.
Both Australia and Thailand would benefit greatly from an ambitious outcome.
Thailand is now our 8th largest trading partner but we think there's a lot more that can be achieved.
Many of you know that Australian companies in areas such as telecommunications, finance, mining, law, engineering and education are all very interested in the Thai market.
They would bring significant investment, as well as vast skills and resources into the Thai economy.
Equally important, by entering into negotiations, both sides would be demonstrating a practical understanding of the changing nature of trade.
That is, of the value of services and investment.
I believe that negotiations and, in time, further commitments, would go hand in hand with Thailand's renewed focus on attracting investment from Australia as illustrated by the reopening of this Thai Board of Investment Office in Sydney.
So our message to the Thai Government is clear. Help us make a good agreement better. You'd be showing regional leadership in helping through free trade to tackle the effects of the regional downturn, and you'd be attracting new investment and new skills to Thailand.
Perhaps more importantly, it would build an exciting new chapter in an already successful and close relationship.
Again, let me thank Minister Chanchai for coming to Australia and wish him every success during his visit, with this seminar and the opening of the new Board of Investment office here in Sydney.
- A$1841 million