Bangkok Post | By Woranuj Maneerungsee | May 30, 2003
There are those who feel it is time to amend or cancel the Thai-US Treaty of Amity that has favoured American firms in Thailand more than those of other nations for 35 years. If not, they fear both countries will be in violation of the World Trade Organisation's most favoured nation (MFN) principle.
The private sector would prefer that the government cancel the treaty. It worries that if the treaty remains in its current form, Thailand would have to open all sectors reserved for Thai people _ like media, farming and land trading _ to all 134 WTO member nations, in keeping with the MFN principle that members treat other members equally. The 1968 Thai-US Treaty of Amity grants Americans the same rights as Thai citizens to operate in many industries in Thailand and has caused some friction between Thailand and other countries that want the same rights.
As members of the WTO, Thailand and the United States are required to raise the treaty issue for discussions sometime this year before the 10-year grace period, requested by Thailand, for not following the MFN principle expires at the end of next year.
The treaty requires partnerships to notify each other one year before any negotiations regarding the treaty can begin.
Pornsilp Patcharin-natakul, secretary-general of the Joint WTO Committee, said that unlike American investors, Thai investors were not able to benefit in a similar fashion as they had not the capability to invest in the US.
American firms have used their right under the treaty by being eligible to operate preserved services under the 1999 Foreign Business Act the same as Thais do. Under that Act, other nations must ask for permission.
One of the prime beneficiaries of the treaty has been American International Assurance, the country's largest life insurer, which is 98% US-owned but qualifies as a Thai'' company. In all other cases the Insurance Act caps foreign shareholdings in local insurers at 25%.
As Thai people do not have real benefit from such a treaty, so why do we have to keep it?'' Mr Pornsilp asks.
Still, there are several services that both countries preserve for their own people including transport, banking, property and agriculture.
Kiat Sittheamorn of the Thai Chamber of Commerce, said Thai governments, current and past, favoured American companies, causing the country troubles with other nations, in particular, Japan.
Japanese executives say that despite being the largest foreign investors in Thailand, they do not receive the same treatment as American firms.
Since the Foreign Business Act became effective in 1999, Japanese companies have obtained 250 approvals from the Commerce Ministry, while American firms have obtained five.
Probably, this (Thai government favouring US firms) might be obstructive for a bilateral free trade area with Japan,'' said Mr Kiet, who is also head of the International Chamber of Commerce.
Nisa Srisuworanant of the Trade Negotiations Department said the Foreign Affairs Ministry dealing with the treaty directly had toned down their opposition to any amendments by helping the Commerce Ministry to work out the problem.Bangkok Post:
