TPP to be signed, rice trade zone to be established, Xayaburi power bought


BANGKOK, 14 November 2012 – The Thai government has agreed to join negotiations in a United States-led free trade agreement (FTA) in a move to be formally announced during US President Barack Obama’s visit to the Kingdom on Sunday.

Thailand’s entry into the Trans-Pacific Partnership (TPP) will be a highlight of the visit by the US president.

The TPP is a proposed regional FTA being negotiated by the US and several Asia-Pacific nations, including Australia, Canada, Vietnam, Mexico and six other countries.

The agreement is aimed at liberalizing trade in nearly all goods and services and includes commitments beyond those currently established in the World Trade Organization.

The cabinet agreed on Monday to the proposal tabled by the Ministry of Commerce to have Prime Minister Yingluck Shinawatra announce the pact in a joint press statement with President Obama.

The agreement would lead to fewer tariffs on Thai exports to the US and would eliminate Thailand’s reliance on the US’s Generalized System of Preferences.

At the same time, the cabinet approved a Commerce Ministry plan to develop a rice trade partnership with Cambodia, Laos, Myanmar and Vietnam to stabilize international rice prices.

According to deputy government spokesman Pakdihan Himathongkam the ministry’s proposal involves the creation of a rice trade zone with the neighboring countries.


The plan will include meetings with government officials from all five countries as well as representatives from the ASEAN rice cooperation committee and ASEAN rice millers and traders’ associations.

Closer commercial and governmental cooperation built into the rice trade zone is expected to stabilize rice prices in global markets, promote food security in the region, and prevent the smuggling of rice from neighboring nations.

The cabinet asked the Ministry of Commerce to form a working group to arrange and plan for the creation of the trade zones. The rice trade zone project has been initially planned to begin with Cambodia and will involve rice trade in the border areas of Thailand and Cambodia, including the provinces of Buri Ram, Si Sa Ket, Sa Kaeo, Prachin Buri and Chachoengsao. The Cabinet also approved a 12-billion baht budget to build facilities to receive electricity from the Xayaburi Dam, currently undergoing construction in Laos.

The facilities, which will be used to obtain, store and relay the electricity, will be built in Loei, Nong Bua Lamphu and Khon Kaen provinces and will be operated by the Electricity Generating Authority of Thailand (EGAT).

The Cabinet has instructed EGAT to adjust the timing of the construction and related projects to suit contingency plans regarding the electricity purchase deal, in order that good relations with Cambodia and Vietnam – which oppose the Xayaburi Dam project – are maintained, without affecting acquisition of electricity and various agreements with Laos.