It is more likely for Thailand to benefit if the new US president will drop the Trans-Pacific Partnership (TPP) trade pact. According to Deputy Prime Minister Somkid Jatusripitak, TPP requirements are quite strict particularly its calls for the opening of agricultural and pharmaceutical sectors that would actually impact on Thailand’s low-income earners and businesses. However, Thai government continues to monitor the policies of the new US president.
Last October 5, 2015, Twelve Pacific Rim countries led by the United States concluded the TPP agreement. The economies of the TPP signatories make up at least 40% of globe trade that has a combined GDP of US$28.3 trillion to represent 38% of the global total. The twelve TPP members account for at least 40% of Thailand’s trade and 45% of direct foreign investment.
The US government has promoted TPP while it was trying to weigh up the Asian market. If the pact is implemented, it may cause export problems to countries that are not members of the TPP trade act. If the pact is aborted, it would prove to be more beneficial. However, if the US commits to moving ahead with the TPP, Thailand still wants to join the pact.
Another trade organization that is vital to world trade is Regional Comprehensive Economic Partnership (RCEP). RCEP was launched in November 2012 to establish deeper economic cooperation between 10 ASEAN members and six trading partners, namely China, India, Japan, South Korea, Australia and New Zealand. 29% of global trade or $9.5 trillion is represented by the member countries.
RCEP is being considered as the more likely route to achieve a free trade area in Asia-Pacific. Asia needs to come together and strengthen its economic ties if Trump will deliver on his promise to “bring back jobs to America” and revive industries that were edged out by foreign competitors.
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