FTA
PETCHANET PRATRUANGKRAI
THE NATION September 27, 2012 1:00 am
The Commerce Ministry has been allocated a budget of Bt70 million to develop a marketing strategy for products while the Agriculture Ministry has been handed Bt100 million to develop farm production. They have worked alone instead of together to ensure mutual development.
The funds are aimed at upgrading the agricultural and industrial sectors. However, they should be restructured and need more budget allocations for long-term development, the ITD says. The institute's research found that affected farming and industries that have applied for FTA Fund support have had to wait at least four months and as much as three years to receive assistance. The budget for each project approval is also quite low as each fund has only about Bt100 million to support many industries each year.
Watcharas Leelawath, deputy executive director of the ITD, said the budget that the government has allocated for the FTA Funds was quite small compared with other funds it supports.
"Inevitably, Thailand and other countries are moving ahead with market liberalisation. The free trade will not create only benefits but also challenges and threats for some industries. Thus the government should focus its plan and budget to help develop impacted farmers and enterprises to ensure their competitiveness," he said.
The government has allocated about Bt100 million to the Agriculture fund and Bt70 million to the Commerce fund.
The study urged the government to integrate the operations of the two FTA Funds to develop the whole supply chain of each industry rather than separately develop farming, production and marketing.
Watcharas said the government should consider converting the FTA Funds into a public organisation so that they will have more flexibility and ability to earn their own income.
Wimon Punkong, chief of research at the ITD, said many sectors still needed the government's continued support to ensure their competitiveness under seamless trade.
Many industries such as garment making and farming are losing their edge because of cheaper products from other countries, especially China. The government needs to increase the efficiency of its FTA Funds to ensure smooth operations.
The seamless market will not only affect enterprises, but could also cause lay-offs. The government should provide measures to alleviate the impact on enterprises and workers that could be affected by the FTA.
Among the many FTAs that Thailand has with partner countries, the two with Australia and New Zealand are highly challenging for Thai dairy and beef cattle producers, the ITD said. The FTA with China has affected farming, garments and electrical appliances.
Somboon Hotrakool, president of the Electrical and Electronics Institute, said the FTA Funds should emphasise the development of small and medium-sized enterprises, as they are hit the hardest by the free flow of cheap products from other countries, especially China.
The funds must be allocated to develop product standards in terms of function and design, as well as to help set standards for monitoring the quality of imported merchandise under the FTAs.
During the past several years, the industry has been allocated a budget of Bt5 million from the FTA Funds to develop the product standards of 30 SMEs.
Prattana Prucsasri, president of the Kamphaeng Saen Beef Cattle Association, said Thai beef cattle were at high risk of being wiped out by the Thailand-Australia FTA as duties are scheduled to be gradually reduced to zero by 2020, starting from 51 per cent before this FTA.
The FTA Fund has already helped set up a central market for beef trading, but has not supported the operating costs of about Bt5 million.
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Source: http://www.nationmultimedia.com/business/Need-to-revamp-FTA-funds-study-30191187.html
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