BANGKOK, Nov 15 – Thailand must be cautious and thoroughly study the pros and cons of the US-initiated Trans-Pacific Strategic Economic Partnership Agreement (TPP), Bank of Thailand (BoT) governor Prasarn Trairatvorakul warned today.
Referring to the government’s planned negotiations with the US on the TPP during President Barack Obama’s visit to Thailand on Sunday and Monday, Mr Prasarn said he has yet to look into details of the agreement but a preliminary study found both pros and cons for Thailand.
“We must aim for the best interest of the country and determine how TPP membership will connect Thailand with the coming ASEAN Economic Community (AEC),” he said.
He pointed out that the AEC will link Thailand more with other countries in the region which shared similar economic size and flexibility.
TPP is different in terms of economic size especially in the financial sector given the liberalisation of finance and banking service, said Mr Prasarn, adding that Thai financial institutes are not as strong as those in the US.
Thai banks are capable of competing with their foreign counterparts domestically but overseas competitions are tougher due to their smaller capital base, he said.
Citing rapid change in today’s financial sector, the BoT governor said Thailand’s financial stability and security must be protected.
On the readiness of Thai financial institutes in light of the AEC, Mr Prasarn said central banks of ASEAN countries are working on standardised measures for commercial banks to operate in other member countries.
Thai financial institutes should start opening banks in other ASEAN countries next year, ahead of the 2020 schedule, he concluded.