For Immediate Release
Office of the Press Secretary
October 19, 2003
Fact Sheet on Free Trade and Thailand
Fact Sheet: President Bush Announces United States Intends to Negotiate a Free Trade Agreement with Thailand
President Bush Announces United States Intends to Negotiate a Free Trade Agreement with Thailand
Today, President Bush announced that the United States intends to negotiate a Free Trade Agreement (FTA) with Thailand. The elimination of the wide array of tariff and non-tariff barriers is expected to increase U.S. exports, particularly of agricultural goods and a range of services, and expand opportunities for American farmers, workers, consumers and businesses.
Thailand is a strong and valued ally on economic, military, security and political matters. The announcement that the United States and Thailand intend to launch FTA negotiations is a recognition of the progress both countries have made in deepening trade relations during the past year. Thailand is prepared to negotiate an agreement that contains the comprehensive coverage and high standards that the United States seeks.
U.S.-Thai Trade Relations: Thailand is the United States' 18th largest trading partner, with two-way trade totaling nearly $20 billion in 2002. Thailand is the 16th largest market for U.S. agricultural exports and 23rd largest market for overall U.S. exports. Top U.S. exports to Thailand include machinery, agricultural products, and aircraft. In 2002, the United States and Thailand signed a Trade and Investment Framework Agreement that has paved the way for the start of FTA negotiations.
Benefits of an FTA: A U.S.-Thailand FTA would:
" Promote U.S. Exports: The United States exported $4.9 billion to Thailand in 2002. An FTA will help increase U.S. exports to Thailand. Although Thailand has liberalized its trade and investment regime over the past several years, its average tariffs remain relatively high at about 16 percent. Through FTA negotiations, the United States will aim to eliminate these tariffs as well as substantially reduce Thailand's significant non-tariff barriers, creating new and substantial opportunities for American businesses. An FTA would particularly benefit American farmers, who currently face tariffs in Thailand averaging 35 percent in addition to an array non-tariff barriers. Other U.S. sectors that would likely benefit from an FTA with Thailand include autos and auto parts, given that Thailand's tariffs on these goods run as high as 80 percent.
" Protect U.S. Investment: An FTA would preserve the preferential status of U.S. investments under the U.S.-Thailand Treaty of Amity and Economic Relations (AER). The AER covers over 1,000 U.S. businesses in Thailand. Total U.S. investment in Thailand is about $20 billion.
" Build on Enterprise for ASEAN Initiative and U.S. -Singapore FTA: President Bush announced the U.S. Enterprise for ASEAN Initiative (EAI) in October, 2002. This initiative offers the prospect of bilateral free trade agreements between the United States and ASEAN countries that are committed to economic reforms and openness. The goal of EAI is to create a network of bilateral FTAs that will increase trade and investment, tying more closely together our economies and our futures. Following on the U.S. -Singapore FTA, a U.S.-Thailand FTA will advance this ambitious initiative. Two-way trade between the United States and Singapore and Thailand combined would be close to $53 billion.
Next Steps: The Administration will consult formally with Congress on a U.S.-Thailand FTA in the coming weeks, pursuant to U.S. Trade Promotion Authority enacted in 2002. After these consultations, the Administration will formally notify Congress of its intent to launch FTA negotiations and outline objectives for the negotiations. Under the requirements of U.S. Trade Promotion Authority, the Administration must then allow at least 90 days for additional consultations before initiating negotiations. During this time, the United States and Thailand will continue to make progress on outstanding bilateral trade issues under their Trade and Investment Framework Agreement and related concerns that will help set the stage for the negotiations to begin in mid-2004.
# # #