Thailand/Australia Free Trade Agreement

The Thailand/Australia Free Trade Agreement came into effect on January 1st 2005 and covers most trade in goods, services and investment.

Of particular interest for Australian exporters has been the phasing removal of tariffs on agricultural goods, steel and manufactured goods. Investment commitments will see the permitting of amjority ownership in mining companies, tertiary education institutions and construction companies (up to 60%).

The agreement also includes the controversial "Investor-State" Disputes Mechanism. This mechanism allows for private companies to challenge governmental regulation on the grounds that it may breech commitments under the FTA. This has been used extensively under other FTAs (most notably the North American Free Trade Agreement) to challenge a range of environmental and public health regulations.  

The agreement also contains the same flawed definition of public services as the GATS agreement and the USFTA. This definition states that public services are exempt if they are provided on a 'non-commercial' basis and solely by government. This means there is uncertainty about whether its rules apply to some public services such as health, education, and water.

IMPACTS

Under the FTA, Australia has seen its manufacturing jobs diminish. In early 2008 Fischer & Paykel announced that it was closing its Brisbane plant and moving it to Thailand, resulting in the loss of 360 jobs. Further to this there have been widespread losses in the automotive sector due to increased imports of cars and automotive parts from Thailand.

Thailand farmers have also had to deal with increased imports of agricultural goods. Thammasat University professor Rangsan Thanapornpan has claimed that in its first year of implementation, imports of milk and dairy products rose by 57%, undermining small scale farmers.

For more information about the agreement see AFTINET's analysis of the text or submission.

For the impacts of FTAs in Thailand see http://www.ftawatch.org/

AGREEMENT TEXT

The full text of the Thailand/Australia FTA is comprised of a number of sections. They can all be accessed at the Australian Government website.