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Good progress in free trade negotiations with Thailand.

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Thursday, 21 November 2002 - MVT152/2002

Good Progress in Free Trade Negotiations with Thailand

Australia and Thailand have agreed to step up the pace of negotiations in a bid to complete a Closer Economic Relations Free Trade Agreement by June 2004, Trade Minister Mark Vaile announced today.

Mr Vaile and Thai Commerce Minister Dr Adisai Bodharamik agreed to the mid-2004 target date for completion of a CER-FTA following a meeting on 16 November.

In a Joint Statement both Ministers welcomed the progress made in the negotiating sessions held to date and made it clear that they were committed to concluding a comprehensive free trade agreement as quickly as possible. 

"Setting a target date of mid-2004 for the completion of negotiations signals our determination to move forward quickly and decisively," Mr Vaile said.

"The ultimate aim of the negotiations is the elimination of tariffs and other barriers to trade and investment with Thailand.  This would be a major boost for the competitive outlook for Australian firms with interests in the Thai market and one that would open up a wide range of new commercial opportunities."

The Ministers also agreed to an 'early harvest' action plan.  Both sides have agreed to give priority to starting and accelerating work in a number of areas.   These include negotiations on investment protection and promotion, examination of the scope for mutual recognition arrangements in selected areas and strengthened cooperation in the area of competition policy.

"This package demonstrates that both governments are committed to achieving a comprehensive and trade-liberalising agreement that will strengthen commercial and business relations between our countries," Mr Vaile said. 

"The Joint Statement agreed to by Dr Adisai and myself is a good first step and I am looking forward to building on it in working towards an ambitious final negotiated package."

Media Contact: Robyn Bain +61 02 6277 7420

Background to the Australia-Thailand Closer Economic Relations Free Trade Agreement (CER-FTA) ●


Mr Mark Vaile, Minister for Trade, Australia                                        Dr Adisai Bodharamik, Minister of Commerce, Thailand 


At their meetingin Sydney on 16 November, Mr Mark Vaile, Minister of Trade of Australia and Dr Adisai Bodharamik, Minister of Commerce of Thailand, exchanged views on the progress of the negotiations between Australia and Thailand for aCloser Economic Relations Free Trade Agreement (CER-FTA).

The Ministers welcomed the progress made in the two negotiating rounds held to date

which have focussed on modalities for the elimination of tariffs and non-tariff barriers on trade in goods and for the liberalization of trade in services, and an "early harvest" package including negotiations of provisions on investment promotion and protection and a variety of cooperative activities. 

The Ministers reiterated thecommitment by both governments to securing as soon as possible a comprehensive agreement that would strengthen commercial and business relations between Australia and Thailand.  The Ministers also recalled the existing agreements on economic and development cooperation between the two countries. 

The Ministers expressed their hope that the business communities and other groups in both countries with an interest in the trade and investment relationship would continue to support strongly the successful conclusion of the negotiations.

The Ministers recalled that, when the negotiations were launched on 30 May 2002, Prime Minister Howard and Prime Minister Thaksin referred to the desirability of announcing results in individual sectors as agreement wasreached.

In this regard, the Ministers announced the following "early harvest" package of cooperative trade-related activities.  They agreed that work in these areas would commence in January 2003 and would be carried forward promptly with the aim of supporting and facilitating the early conclusion and implementation of the CER-FTA:

enhanced consultations on sanitary and phytosanitary (SPS) issues; ● negotiations of provisions on investment promotion and protection; ● cooperation and capacity-building with regard to competition policy; ● mutual recognition arrangements (MRAs); ●

promotion of e-commerce; ● cooperation on sustainable tourism development; and ● enhanced cooperation on educational services. ●

The Ministers agreed to make their best efforts to conclude by June 2004 a balanced and mutually acceptable CER-FTA that liberalized and facilitated trade in goods and services and investment in a way that was consistent with the provisions of the WTO Agreement. 

They also agreed to reinforce cooperation in other trade-related areas of mutual interest such as customs facilitation and cooperation, intellectual property rights and information and communication technology.

The Ministers instructed their officials to intensify their efforts.  They undertook to maintain close contact as the negotiations moved forward and agreed to meet in the second half of 2003 to review the progress and issue further instructions to their negotiators.


Australia-Thailand Closer Economic Relations Free Trade Agreement (CER-FTA) 

State of play in the negotiations

Two rounds of negotiations have been held to date, in August and October.    The first round focussed on defining the objectives of the negotiations and the key principles, and on determining the range of issues to be covered by the agreement.   The first negotiating meeting also established expert groups in the areas of rules of origin, investment and standards, which have been charged with taking forward the detailed technical work in these areas. 

The main focus of the second negotiating session was a discussion of options for eliminating tariffs and non-tariff barriers and liberalising trade in services.  These are the key elements of the negotiations from Australia's perspective ( Thailand has an average tariff of around 18%) and will be at the centre of the negotiating process.    Exchanges on tariff elimination options are expected to move to an intensive phase at the next

negotiating session (scheduled for early 2003).  The second negotiating session also involved more detailed discussions on the coverage of the agreement, and preliminary exchanges were held on a number of other issues, including possible commitments in the area of government procurement and an approach to liberalisation and enhanced cooperation in the information and communication technology (ICT) sector.

Australia's objectives

Australia's aim is to secure an agreement that eliminates tariffs and non-tariff barriers on goods and services and liberalises the investment regime.  The Government is determined to achieve an ambitious agreement even if this takes a little longer.  This is fully in line with the Government's policy on free trade agreements (FTAs), specifically that it favours pursuing such agreements if there are clear commercial and trade policy benefits and if better results can be secured more quickly than is possible in the WTO negotiations. 

Economic modelling suggests the CER-FTA would boost both countries' GDP because of the stimulus to trade, investment and competitiveness that such an agreement would bring.  The key benefit for Australian companies would be from substantially improved access to the Thai market in a wide range of areas.  Australian services exporters and investors would also stand to benefit from a more liberalised, transparent and predictable regulatory climate in Thailand. 

Joint Ministerial Statement

The Joint Statement agreed by Mr Vaile and the Thai Commerce Minister Dr Adisai Bodharamik on 16 November confirms that the core of the CER-FTA will be the elimination of tariffs and non-tariff barriers on trade in goods, provisions for the liberalisation of trade in services and two-way investment as well as a range of cooperative activities in areas of mutual interest.  Overall, the CER-FTA will be aimed at developing economic integration between Australia and Thailand.   The Joint Statement includes a mid-2004 target for the completion of the negotiations .

"Early harvest" activities   

Stemming from comments made by the two Prime Ministers when they launched the negotiations in May 2002, the Joint Statement also reflects an agreement between the two countries to give priority to starting and accelerating work in a number of areas.  The key areas of interest for Australia are negotiations on investment protection and promotion, the examination of mutual recognition arrangements in sectors of high priority to Australian exporters and the strengthened cooperation in the area of competition policy. 

The reference to sanitary and phytosanitary (SPS) consultations reflects the fact that Australia has maintained a constructive dialogue with Thailand on quarantine issues and is prepared to continue that process which is focussed on identifying ways in which Thailand could improve its systems to a level comparable with Australia's.  Australia has made it clear that it maintains a science-based, non-discriminatory approach to decision-making in the area of quarantine and that the Australian Government is not prepared to countenance any weakening of its quarantine standards. 

Australia is prepared to keep an open mind on the possibility of future early announceables from the negotiations if such outcomes would contribute positively to the goal of an ambitious and comprehensive agreement.  Australia believes that maintaining a single package of commitments on goods, services and investment liberalisation will maximise the prospects of a substantial trade-liberalising outcome.   

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Local Date: Friday, 22-Nov-2002 14:12:14 EDT