RESTRICTED
WORLD TRADE WT/TPR/G/9
21November 1995
ORGANIZATION(95-3658)
Original: English
TRADE POLICY REVIEW
THAILAND
Report bytheGovernment
Inpursuance oftheAgreement establishing theTrade Policy Review Mechanism
(Annex 3oftheMarrakesh Agreement Establishing theWorld Trade Organization),
thesecond policy statement submitted bytheGovernment ofThailand isattached.
Note: Thisreport issubject torestricted circulation andpress embargo untiltheendofthemeeting
oftheTrade Policy Review Body onThailand.Thailand WT/TPR/G/9
Page iii
TABLE OFCONTENTS
Page
I. EXECUTIVE SUMMARY 1
II. THE ECONOMIC AND TRADE ENVIRONMENT 2
(i) Economic Developments 1992-1994 2
(ii) Economic Situation in1995 2
(iii) Medium-Term Outlook for1996-2000 3
III. TRADE POLICY DEVELOPMENTS 1992-1995 4
(i) TheUruguay Round 4
(ii) Anti-dumping andCountervailing Measures 4
(iii) Export Regime -TaxRebates 4
(iv) Tariff Restructuring 5
(v) Services Sector 6
(vi) Measures onInvestment 6
(vii) Sub-regional Economic Cooperation 6
(viii) Asia-Pacific Economic Cooperation (APEC) 7
(ix) ASEAN FreeTrade Area (AFTA) 7
(x) Protection andPromotion ofIntellectual Property Rights 8
(xi) Legislative Development inEnvironmental Laws 9
IV. FUTURE POLICY DIRECTIONS 10
(i) Services Sector Liberalization 10
(ii) ASEAN 10
(iii) APEC 11Thailand WT/TPR/G/9
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I. EXECUTIVE SUMMARY
1. Asoneofthefastest growing economies intheworld, Thailand haslongrecognized the
importance oftradepolicy initsdevelopment. Trade measures havebeeninstrumental instrengthening
thecompetitiveness ofdomestic industries tocompete intheworld market. Being anopeneconomy,
Thailand hasparticipated actively invarious international forums suchastheUruguay Round of
multilateral tradenegotiations, theAsia-Pacific Economic Cooperation forum (APEC), andtheASEAN
FreeTrade Area.
2. Since itsaccession totheWorld Trade Organization on1January 1995, theThaiGovernment
hasimplemented various measures incompliance withitscommitments intheWTO. Thetariffsystem
hasbeenrestructured while alawwasenacted inaccordance withtheTRIPs agreement, tobefollowed
bynumerous other lawswhich arebeing drafted. Most oftheservices sector areontheverge of
liberalization. Inaddition, quantitative restrictions onmany agricultural products havealready been
dismantled andreplaced bytariff measures inlinewiththeprocedure prescribed intheagriculture
agreement. Inshort, Thailand hastrieditsutmost toquickly andsincerely implement itscommitments
intheWTO.
3. Thailand isalsoenthusiastically participating invarious regional cooperation schemes. Asa
country intheAsia-Pacific region, Thailand closely follows developments inAPEC andwillendeavour
toensurethatthisforumwillremainconsistentwithmultilateralism,theconceptenshrinedinthecreation
oftheWTO. Asoneoftheleading economics inASEAN, Thailand proposed theestablishment of
AFTA andcontributes considerably initsactualization process. Inaddition, thecountry isengaged
invarious sub-regional cooperation withitsneighbours, hoping thatthiswould bring about affluence
totheregion inthefuture.
4. Insummary, Thailand hasrealized theimportance offreeandopen trade tothecountry 's
development. Thus itshallcontinue touphold itsbelief inliberal trade aswellasconduct itstrade
policy inatransparent andfairmanner. With this,Thailand hopes toachieve thedouble benefits of
attaining economic prosperity andremaining asignificant player intheworld trade arena.WT/TPR/G/9 Trade Policy Review
Page 2
II. THE ECONOMIC AND TRADE ENVIRONMENT
(i) Economic Developments 1992-1994
5. After fourconsecutive years ofrapid expansion averaging over10percentperannum, the
Thaieconomy appeared toreturn toamoresustainable path. Thailand 'sGross Domestic Product (GDP)
moderated to8.4.percentin1991 duetocautious monetary andfiscal policies andaslow-down in
private consumption andinvestment.
6. In1992, thepaceofThailand 'seconomic expansion moderated further inresponse tothe
slowdown intheworld economy andthedomestic political uncertainty earlyintheyear. Theeconomy
grew by7.9percent, slightly lessthanin1991 butstillrelatively highbyregion 'sstandard. Many
important monetary andfiscal measures wereimplemented, inparticular, theabolition ofinterest rate
ceilings, therelaxation offoreign exchange control, thebroadening inthespectrum ofbusiness operated
byfinancial institutions, thepromulgation oftheSecurities andExchange ActB.E.2535 (1992), the
modification ofthetaxstructure andthesubstitution, ofthevalue added taxforthebusiness tax.
7. In1993, therewasanoverall improvement intheThaieconomy withagrowth rateof8.4per
cent. Theexpansion wasunderpinned bybuoyant domestic demand, particularly private investment,
andsupported byastrong performance inmanufactured exports. However, inthefirsthalfofthe
year,thepaceofeconomic expansion wasconstrained byseveral factors including depressed farmprices,
alacklustre performance oftheagricultural sector, anddelays inbudgetary disbursements andlarge-scale
investment projects.
8. Inanattempt tofurther deregulate theThaifinancial system, theThaigovernment established
theBangkok International Banking Facility (BIBF) inMarch 1993 andpermitted commercial banks
andfinance andsecurities companies toundertake newbusinesses. These measures aredesigned to
pavethewayforThailand tobecome aregional financial centre. Furthermore theExport-Import Bank
(EXIM Bank) wassetupin1993toprovide comprehensive financial services tobusiness enterprises.
9. In1994, theThaieconomy recovered strongly forthesecond consecutive yearfromthetrough
of1992. Inlinewiththepickup intheworld economy, economic growth accelerated to8.7percent,
driven bystrong exports androbust domestic spending. Major factors contributing totherapideconomic
growth in1994 weretheimprovement intheeconomies oftheThailand 'smajor trading partners and
theassociated riseinthedemand forThaiexports, anincrease inbothpublic andprivate investment
andthebuoyant agricultural sector.
(ii) Economic Situation in1995
10. In1995, theThaieconomy isforecasted toexpand attherateof8.8percent,withaninflation
rateof5.1percent. Thedriving forces underlying theexpansion aretwo-fold. First, theanticipated
recovery intheworld economy, particularly theU.S., Japan, andtheEUwillactascatalysts in
accelerating thecountry 'sexports. Thiswould further beaided bythesuccessful conclusion ofthe
Uruguay Round ofmultilateral trade negotiations. Second, investments bothpublic andprivate are
expected toremain atahighlevel. Private investment isestimated toincrease attherateof10.4per
centin1995compared to8.9percentinthepreceding year. Interms ofpublic investment, 1995should
seelarge-scale investment inbasic infrastructure projects. Asaresult, public sector investment is
projected toincrease by19.1percentcompared to13.8percentin1994.Thailand WT/TPR/G/9
Page 3
11. Higher investment isexpected tohave afavourable impact ontheoverall economy with
construction andagriculture expected toexpand by10.3percentand3.2percent,respectively. The
manufacturing sector willenjoy further expansion withtheslightly higher growth rateof11.6percent,
compared to11.5percent, asaresult ofhigher export growth.
12. Theservices sector 'sshare ofGDP shallcontinue togrow, accounting approximately for50
percent, while theshare formanufacturing sector willremain at30percent. However, theshare
foragriculture inGDP willbereduced toaround 10percent.
13. Inflation willincrease slightly, from 5.0percentin1994 to5.1percentin1995, because of
theupward trend inagricultural prices andtheriseoftheminimum wage rateandpurchasing power.
14. Thetrade deficit willdecline from6.3percentofGDP in1994 to6.1percentin1995. The
current account deficit isestimated tobeUS$8.8billion, orequivalent to5.4percentofGDP, aslight
decline from 5.9percentin1994.
15. Thecountry 'soverriding concern hasbeentheinfrastructure deficiency duetotherapid pace
ofdevelopment andtheshortage ofskilled labour andmanpower, particularly inareas where theyare
mostneeded. With 60percentoftheemployed persons inthefarmsector, agriculture continues to
bethemain source ofemployment
(iii) Medium-Term Outlook for1996-2000
16. TheThaieconomy in1996 willmaintain itsstrong growth rateof8.9percentforanother
year. Theinflation ratewillbekeptataround 5.0percent,asitisexpected thattheworld prices of
primary commodities, including oilprices, willbestabilized. TheThaiGovernment, inorder toprevent
theeconomy from being overheated, willcontinue toclosely monitor itseconomy andtomaintain a
tightmonetary policy overcredit expansion andcapital movement.
17. TheThaieconomy isexpected tosustain agrowth rateof7-8percentuntiltheyear2000.
Thisforecast isbased onThailand 'scapability toexpand itsexports attherateof16percent, and
thesteady increase indomestic consumption ofabout 11percent. Theliberalization policies willhelp
enhance Thailand 'srôleintheworld aswellasregional markets. Itisexpected thatThailand will
alsoseeasurplus inthecurrent account forthefirsttime, from theyear2000 onwards.WT/TPR/G/9 Trade Policy Review
Page 4
III. TRADE POLICY DEVELOPMENTS 1992-1995
18. AsThailand 'seconomic performance hasbecome increasingly dependent oninternational trade,
theprimary goalofThailand 'strade policy istoready thecountry foragreater roleintheworld
community. Thus, thegovernment hasemphasized measures suchasconducting liberal economic policy
throughafreeandopenmarketmechanism,liberalisingtradedomesticallyandencouragingaconstructive
andcompetitive economic structure.
(i) TheUruguay Round
19. Thailand hasbeenactively involved intheUruguay Round negotiations withanobjective to
assuregreatertradeliberalizationthroughreducingoreliminatingtariffandnon-tariffbarriers,improving
theeffectiveness oftherules governing international trade, bringing about fairness andtransparency
intheworld market andpreventing newtrade barriers thatmayobstruct international trade.
20. Ingeneral,ThailandiscontentwiththesuccessfulconclusionoftheUruguayRoundnegotiations.
Thailand believes thattheestablishment oftheWTO andtheimprovement ofinternational trade rules
andnegotiations would create amore stable economic environment inwhich greater transparency and
predictability would beconducive toprogressive liberalization ofworld trade. With thisbelief, the
country became the59thfounding member oftheWTO on28December 1994.
21. Thelegal status oftheURagreements aresimilar toother international agreements which
Thailand hadsigned. Prior tosigning aninternational agreement, itmustbeensured thattheagreement
isconsistent withitsdomestic law. Inorder toratify theWTO agreements, Thailand enacted the
Protection oftheWTO 'sOperations Actandamended theCustoms Tariff Regulation B.E.2531.
22. Toimplement itscommitments made under theAgriculture Agreement, Thailand hastoreduce
anaverage of24percentoftariffs onagricultural products. Itwillalsoeliminate non-tariff barriers
for23agricultural products andconvert these NTBs intotariff measures inaccordance withthe
tariffication process. Thailand hasalsocommitted toreduce almost 4,000 items or70percentoftariff
concessions onindustrial andfisheries products, resulting intheaverage reduction of28percent.
Inservicessector,Thailandhassubmittedascheduleofmarketaccesscovering95activitiesand10major
sectors.
23. Thailand, however, realizes thattherealsuccess oftheURnegotiations doesnotdepend solely
ontheexistence ofeffective disciplines andrulesgoverning theworld tradesystem. AllWTO members
must honour theircommitments andbesincere inimplementing theirobligations.
(ii) Anti-dumping andCountervailing Measures
24. Toprotect domestic industry frombeing unjustly affected byproducts imported atunfair prices
orbysubsidized imports, theMinister ofCommerce, asempowered bytheExport andImport Act
B.E.2522andwiththeapproval oftheCabinet, announced aNotification oftheMinistry ofCommerce
on26September 1991. Thisnotification established criteria andprocedures fortheimposition ofspecial
dutyonproducts which areimported intoThailand atunfair prices aswellassubsidized imports.
25. However, following Thailand 'saccession totheWTO, theMinistry hastoamend theabove
notification inorder tocomply withitscommitments totheWTO. Adraft Anti-dumping and
Countervailing Actwasprepared which wastobepresented totheCabinet andNational AssemblyThailand WT/TPR/G/9
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forapproval aslaw. Unfortunately, duetotheparliament dissolution inMay, thisprocess hasbeen
delayed.
(iii) Export Regime -TaxRebates
26. Since thelastTPRM, anotification wasannounced inlate1991bytheCommittee Considering
theCompensation ofTaxandDuty ontheExported Goods Produced intheKingdom abolishing the
previous rebate rates.
27. Thenewrebate ratesarecarefully calculated totheeffect thattherebated refunded amount
isnothigher thanthattaxed.
28. Following theintroduction oftheValue Added Tax(VAT) inJanuary 1992, thecurrent schedule
ofrebate ratesapplies onlytoproducers whoarenotentitled totaxconcessions under other schemes
except theconcession onmachinery provided bytheBOI.
(iv) Tariff Restructuring
29. Duetotherapid growth andindustrialization oftheThaieconomy, itisnecessary thattheThai
Government restructure itstariff system toenable industries tooperate efficiently. Since 1990, the
Thai Government hasrestructured customs tariff onnineproduct categories covering atotalof
2,990 items, or39.52 percentofallcustoms tariffitems. Themostrecent cuts,which wereannounced
bytheMinistry ofFinance andeffective on1January 1995, enlarged theproduct coverage toeleven
product categories: petrochemical goods, plastic andrubber; textile products; leather, leather goods,
shoes, hats,etc.; wood, paper pulp, printed matter; glass, ceramics, stone products, plaster, cement,
asbestos, mica, jewellery; foodproducts, beverages, spirits andtobacco; automobiles andspare parts;
furniture, toys, artobjects, antiques andmiscellaneous goods; watches, musical instruments, arms
andammunition; machinery andelectrical appliances; andchemical goods usedindyes. Theaverage
tariff rateswilleventually belowered from 30.24 percentto17.01 percentin1997.
30. Inaddition, 39tariff ratecategories havenowbeenreduced toonlysix,soastofacilitate
industrial development inThailand. Thesixdifferent tariff rates, inaccordance withtheprinciple of
value-added escalation, areasfollows: zeropercentfornecessary goods suchasmedical equipment;
onepercentforrawmaterials andelectronics partsandvehicles forinternational transport; fiveper
centforprimary andcapital goods; tenpercentforintermediate goods; 20percentforfinished products
and30percentforgoods which require additional protection.
31. Agrace period forthisreform willbeintwophases. Thefirstphase willrequire tariff cuts
ofonlyhalftheintended amount. Thesecond stage callsforthefulltariff cuttobeintroduced on
1January 1997.
32. Asamember oftheWTO andakeymember oftheASEAN FreeTrade Area (AFTA), the
Thai Government hasundertaken thereduction ofimport duties andtrade barriers aspartofits
obligations. Attheendof1994, tariff ratesonalmost 4,000 items werereduced inorder tocomply
withWTO obligations. Inaddition, thequantitative restrictions onimportation of22agricultural goods
andtobacco were converted totariff measures.WT/TPR/G/9 Trade Policy Review
Page 6
(v) Services Sector
33. Inlinewiththespirit ofprogressive liberalization, Thailand hasmade significant commitments
tofinancial liberalization inallareas offinancial services; namely, banking, securities andinsurance.
Inallfinancial services sectors, Thailand hascommitted nottointroduce newdiscriminatory measures
against foreign financial institutions.
(a) Financial Sector
34. Thesecond phase (1993-95) offinancial reform inThailand provides further deregulation to
extend thescope offinancial institution activities, develops markets fordebtinstruments, andimproves
theoperations ofrepurchase market.
35. Thisphase alsoincludes measures tomobilise saving suchapromoting contractual savings
schemes; enlarging thescope ofactivities ofspecialized financial institutions; improving lawsand
regulations; encouraging commercial banks andfinance companies toopenregional branches.
36. Furthermore, inanattempt todevelop Thailand intoaregional financial centre through the
mobilization offunds atlower costandtheprovision offinancial services toneighbouring countries,
Thailand launched theBangkok International Banking Facility (BIBF) inearly 1993; expanded the
useoftheThaiBaht; andprovided technical assistance tocentral banks ofIndochinese countries.
(b) Securities Sector
37. Forsecurities companies, foreigners maynowacquire upto49percentofregistered capital.
Thisissignificant because from nowonfinancial development canonlyproceed inthedirection of
more openness.
(c) Insurance Sector
38. Forinsurance business, Thailand hascommitted toastandstill withmarket access forforeigners
permitted upto25percentofregistered capital.
(vi) Measures onInvestment
39. Where promotional privileges have been granted, andacertificate issued bytheBOI,
wholly-owned foreign businesses willbeallowed tooperate forinvestments undertaken intheareas
ofbasic infrastructure, public utilities anddevelopment oftransportation systems asoutlined under
Thailand 'sSeventh National Economic andSocial Development Plan. Thispolicy isanimprovement
tothecommitment onnational treatment andmarket access under theGATT agreement.
(vii) Sub-regional Economic Cooperation
40. Thailand hascontinued itshealthy relationship withneighbouring countries through economic
links andcooperation under twomajor sub-regional groupings.
41. Firstly, inDecember 1993, theIndonesia-Malaysia-Thailand Growth Triangle (IMT-GT) was
established. Thissub-regional grouping, which consist ofthestates ofNorthern Sumatra andDiAceh
ofIndonesia, thefourstates ofNorthern Malaysia andthefiveprovinces ofSouthern Thailand, was
formed inorder toaccelerate private sector participation ineconomic growth, aswellastoexpandThailand WT/TPR/G/9
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exports andincrease income through thefacilitation ofeconomic development inthesub-region.
CooperationbetweenthesecountriesextendstotariffreductionsundertheAFTAscheme,whichrequires
equal tariff ratesineachcountry. Inaddition, non-tariff measures havealsobeenrelaxed under the
IMT-GT, including decentralization ofauthority intheissueofimport license, facilitation ofinformation
exchange between countries andtheservices provided bytheChamber ofCommerce andIndustry (CCI)
andtheAsiaDevelopment Bank, allofwhich aimstoincrease andfacilitate private sector participation
intheeconomic development oftheregion. TheIMT-GT istobeseeninthenearfuture asanarea
ofeconomic integration. Tosupport thisvision, agreement hasalready beenreached tolaunch 20
newjointprojects insixmajor areas covering infrastructure, trade andindustry, human resource
development, agriculture, tourism andservices.
42. Secondly, Thailand isalsopartofaneconomic cooperation group aimed atstrengthening
economic tiesamong countries within theGreater Mekong Sub-region. Established in1991, this
sub-regional grouping consists ofsixcountries, namely Cambodia, LaoPeople 'sDemocratic Republic,
Thailand, Vietnam andYunnan Province ofthePeople 'sRepublic ofChina which shares borders and
many important resources including theMekong River. Theneedforeconomic restructuring and
development ofthesub-region coupled withstrong willandcommitment onthepartofthose countries
hasencouraged Thailand tobeactively involved inanumber ofprojects aiming atimproving the
transportation network anddeveloping infrastructure andenergy resources inthearea. Inaddition,
Thailand encourages thisgroup ofcountries toadopt amarket oriented system andsupports theirevery
efforts tobecome partoftheinternational trade arena. Now thatVietnam isamember ofASEAN,
other countries mayhopefully follow inthenearfuture. Thailand alsogives special emphasis tohuman
resource development through education andtraining programmes which isfundamental importance
toeconomic development inamarket environment.
(viii) Asia-Pacific Economic Cooperation (APEC)
43. Thailand hasmade clearitscommitment toapolicy ofopenregional trade, whether inASEAN,
theAsia-Pacific region orelsewhere.
44. Thailand 'spolicies towards APEC willbemade compatible withitscommitments under the
WTO.Inthiscontext,Thailandstressestheimportanceofliberalization,tradeandinvestmentfacilitation,
andtechnical cooperation intheAPEC region rather thantheformation oftrade blocs. Inaddition,
since economic growth andstandard ofliving depend ontheability toattract trade, investment and
technology, tariff reforms inThailand havebeeninitiated inanattempt torelax therestrictions onthe
flowofgoods, services andcapital. Thailand believes thatthere should beacomprehensive coverage
ofissues under APEC andthatliberalization should beundertaken onaunilateral andvoluntary basis.
Indeed, Thailand supports thedecision oftheAPEC Leaders toundertake work aimed atdeepening
andbroadening theoutcome oftheUruguay Round andtocontinue theprocess ofunilateral tradeand
investment liberalization.
(ix) ASEAN FreeTrade Area (AFTA)
45. Thailand hasactively advocated theimplementation ofAFTA. ThefirstdraftAFTA proposal
wassubmitted byThailand totheASEAN Senior Economic Officials Meeting (SEOM) inKuala Lumpur
inOctober 1991. Theamendments totheThaiproposal wasthenendorsed bytheASEAN Economic
Ministers Meeting (AEM) andlaterbytheASEAN Summit.WT/TPR/G/9 Trade Policy Review
Page 8
46. Theconcept ofAFTA istoreduce intra-regional tariffs onallmanufactured items including
capital goods andprocessed agricultural products to0-5percentandtoremove non-tariff barriers over
a15-year period commencing 1January 1993 andfinalising bytheyear2008.
47. AsforThailand, twopackages oftariff reductions under AFTA implementation havealready
beenannounced since 1993. On15February 1993, theMinistry ofFinance brought intoeffect the
reduction to30percentoftariff ratesonallmanufactured items imported from ASEAN, except for
certain sensitive products suchaspetrochemical, plastic products andtelevisions, etc.Thesecond
announcement wasmade on27December 1994 toreduce further tariff ratesofproducts under the
FastTrack Programme inaccordance withthetariff reduction schedule asfollows:
From To
26-30 percent 25percent
21-25 percent 20percent
15-20 percent 15percent
11-14 percent 10percent
6-10percent 5percent
48. However, inviewofthepresent economic challenges andtheconclusion oftheUruguay Round
multilateral negotiations, theAEM Meeting under theChairmanship ofThailand inSeptember 1994
inChiangmai, ASEAN agreed toshorten thetimeframe fortherealization ofAFTA from 15to10
years, finishing by1January 2003 instead of2008, andtoinclude unprocessed agricultural products
intotheCEPT scheme. ASEAN isworking ontheschedules oftariff reduction under thenewtime
frame which would beready forimplementation starting from 1January 1996.
(x) Protection andPromotion ofIntellectual Property Rights
49. Since 1990, theGovernment ofThailand hasfocused itsattention onbothenforcement and
promotional aspects ofintellectual property rights. Allefforts havebeenreinforced bytheentry into
force ofthenewCopyright ActonMarch 21,1995. Inaddition, these havebeencomplemented by
themove tosetupaspecialized court onintellectual property, thedraftlawonwhich hasalready been
approved bytheThaiCabinet (asofJuly5,1995).
50. ThenewCopyright Actcomplies withtheTRIPs standards andtheBerne Convention (Paris
Act). TheCopyright Actcovers literature works suchasbooks, journals, printed matter, translated
works, articles, speeches, computer software andmusic. Thenewcopyright lawregulating computer
software isexpected toexpand theThaicomputer software market andstimulate thedevelopment of
newsoftware andother computer related products bybothlocalandforeign manufacturers. Asaresult,
thecomputersoftwaremarketwouldbecomemorecompetitive,leadingtolowerprices.Despitepossible
adverse effects intheshort term, computer software users willbenefit from thenewcopyright law
overthelongterm.
51. ThePatent Act(No.2)B.E.2535(1992) repeals thePatent ActB.E.2522(1979) andcovers
twotypes ofpatents: patents forinvention anddesign patents. Theamendment wasinfluenced by
pressure fromtheUnited States which claimed thattheThaiPatent Lawdidnotsatisfactorily protect
certain inventions oftheU.S., particularly pharmaceutical products. Theamendment ofthePatent
Actstarted atthetimethenegotiation oftheTRIPs agreement wasabout toconclude. Therefore, the
amendment provisions weredrafted tobeconsistent withthedraftoftheTRIPs agreement pertaining
totheprotection ofpatents.Thailand WT/TPR/G/9
Page 9
52. Thetrademark rightiscurrently recognized bytheTrademark ActB.E.2534 (1991), which
became effective in1992. Theamendments, which make upthenewlaw,provide higher penalties
forinfringements andalsoextend protection toservices, certification andcollective marks. These
amendments would create aviable legalframework andimprove enforcement.
53. Thethreelawsmentioned above areconsistent withthemajor principles intheTRIPs agreement.
(xi) Legislative Development inEnvironmental Laws
54. Themajor piece ofenvironmental legislation inThailand istheEnhancement andConservation
ofNational Environment Quality Actof1992(NEQA). Thiscomprehensive pieceoflegislation updates
andstrengthens existing lawswithin apolicy framework outlined intheSeventh National Economic
andSocial Development Plan. Certain fundamental changes have been made inenvironmental
management under thenewlawinThailand. Forexample, thepublic sector isnoweligible toapply
usercharges oncentral treatment plants andthepolluters areresponsible fordamages resulting from
theirpollution discharges. Also, thegovernment islooking forinnovative andappropriate market
instruments toprovide theeconomic incentives forindustries totakeresponsibility fortheirwaste etc.
Although these market instruments willbeusedinconjunction withcommand andcontrol instruments
formaximum effectiveness.
55. Theadministrative framework laidoutinNEQA raises theprofile ofenvironmental issues to
thenational/ministerial levelbeyond thedepartmental level. Thecreation ofaNational Environment
Board (NEB), chaired bythePrime Minister, provides atop-level forum fordiscussion of,andpolicy
recommendations for,environmental issues inThailand. Furthermore, an"Environmental Fund" was
established under theMinistry ofFinance andissupervised bytheNEB.
56. Another important environmental lawistheFactories Act1992. Under thislaw,thelicensee
tooperate afactory hasamajor dutynottorelease polluted water, toxic waste oranyother things
resulting from theoperation ofhisfactory thatmayhaveadverse effects ontheenvironment. The
licensee alsohasanobligation nottocause anydanger, damage ornuisance topersons orproperties
existing inornearthefactory through theoperation ofthefactory.WT/TPR/G/9 Trade Policy Review
Page 10
IV. FUTURE POLICY DIRECTIONS
(i) Services Sector Liberalization
(a) Financial Sector
57. Thailand hasreaffirmed itsliberalization plans which willcome about step-by-step asfollows:
Step1:Allow theset-up offivenewbanks, which willaddtotheexisting 15banks. Foreign
investors areallowed tohold25percentstake inthenewbanks.
Step2:Thailandwillallowfull-statusforeignbanksoperatinginThailandtoopentwobranches.
They arecurrently restricted toonebranch only. Foreign banks willbeabletoset
upmore thanonebranch outside Bangkok anditsvicinity, butonlyonemore ifthe
location isinBangkok.
Step3:Thailand isready towelcome more foreign banks intotheBIBF forthesecond round.
Atpresent, 22foreign banks hadbeengranted licenses tooperate under theBIBF.
Amaximumof7BIBFswhichhaveopenedregional/provincialbranchesmaybeeligible
toapply forfull-licensed status by1997subject toterms andconditions tobeannounced.
Inaddition, theProvincial International Banking Facility (PIBF) hasbeenallowed sinceJanuary 1995.
Banks currently withtheBIBF willbeabletoexpand intothePIBF by1997.
(b) Insurance Sector
58. Theinsurance sector inThailand isontheverge ofextensive liberalization. Inthefirststage,
thenumber oflicences fornewdomestic insurance companies willbeincreased, butonlyforThai
applicants. Inthesecond stage, thegovernment willallow foreign companies toincrease their
shareholdings ininsurance firms above thepresent 25percentlimitbutnottoexceed 49percent.
Inthefinalstage, thegovernment willfullyliberalize theinsurance sector toforeigners.
(c) Telecommunications
59. Thegovernment-owned Telephone Organization ofThailand andtheCommunications Authority
ofThailand havebeentargeted forderegulation. Thisrecent move bythegovernment willseethe
telecommunications sector inThailand liberalized by1998.
(ii) ASEAN
60. Thailand willhosttheFifth ASEAN Summit inDecember 1995. Asbefore, Thailand will
continue toexert effort toensure thesmooth andrapid actualization ofAFTA sothatAFTA willbe
meaningful under thetrend towards world economic liberalization. ASEAN 'saimtoenhance its
competitiveness cannot beattained under thepresent structure ofAFTA implementation alone. Deeper
economic integration isrequired. ASEAN isalsoworking onother areas ofcooperation.
61. Framework Agreement onservices andaFramework Agreement onIntellectual Property are
expected tobesigned bytheASEAN Economic Ministers attheFifth ASEAN Summit.Thailand WT/TPR/G/9
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(iii) APEC
62. Thailand 'sactive roleandcontribution towards theAPEC Action Agenda represents clear
evidence ofitsintention tomake policy adjustments which fallinlinewiththecommitment toenhance
trade andinvestment liberalization andfacilitation intheregion. Thailand hastouched onallfifteen
areas intheAction Agenda ranging from tariff reductions toinformation gathering andanalysis, and
willmove swiftly inpreparing anAction Planintimeforthe1996 APEC meeting inManila. This
Action Planwillfurther highlight thepolicies tobeimplemented bytheThaiGovernment ineachof
theseareas, withparticular emphasis intheareasoftariffandnon-tariff measures, services, investment,
customs procedures andintellectual property rights.