Are Free Trade Agreements (FTA) Always Good For Both Countries Involved?
By: Peter Kopitz
Many important issues regarding a free trade agreement are often overlooked or misunderstood. Taking Thailand as an example, the government and the negotiator teams always emphasize that Thailand will benefit from the deals by obtaining a lower tariff rate. Presently, the average import tariff rate on the US is only 3.4 percent. The real barriers are in the non-tariff measures such as contingency protection, technical measures, subsidies and rules of origin, not the tariff measures. Moreover, under the constitution, Thailand is a single state. Thus any deal will enter into force for the entire area. This is different in the US, as it has both a federal government and state governments, and the state government may choose not to enforce some sections of an FTA.
Also, besides the Thai government and a few officials no one knows the details of the agreements, and the public has been kept in the dark. Some Thai sectors, like the transportation sector, will be hit hard, as foreign companies have a more funds and better technology. Overall, free trade agreements are not always fair and don’t offer equal benefits to both parties, so the government and the public should be aware of these discrepancies and integrate them into their decisions.
Peter Kopitz is currently living in Bangkok, Thailand after graduating with Honors from the University Of Chicago Graduate School Of Business with a Masters Degree in Business Administration. He is actively involved in researching economic and political development in Thailand, focusing primarily on property development, security analysis and investment banking. Hawaii Home Loans | Honolulu Realtor | Hawaii Rentals