Note: Advance written questions by WTO Members and replies provided by the Government of  
 Thailand are reproduced in document WT/TPR /M/123/Add.1 and will be available online 
 at:  http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm.  WORLD TRADE  
ORGANIZATION  WT/TPR/M/123 
28 January2004 
 (04-0293) 
Trade Policy Review Body 
12 & 14 November 2003  
 
 
 
TRADE POLICY REVIEW 
 
THAILAND 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mrs. Mary Whelan (Ireland) 
 
 
   P a g e  
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE RE PRESENTATIVE OF THAILAND 4 
III. STATEMENT BY THE DISCUSSANT 9 
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 11 
V. REPLIES BY THE REPRESENTATIVE OF THAILAND AND ADDITIONAL 
COMMENTS  18 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 23 
 
  WT/TPR/M/123 
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I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The fourth Trade Policy Review of Thailand was held on 12 and 14 November 2003.  The 
Chairperson welcomed the delegation of Thailand, led by H.E. Ms. Puangrat Asavapisit, and the 
discussant, H.E. Mr. Seixas Corrêa (Brazil).  As usual, the discussant would speak in his personal 
capacity and not as a representative of his country.  In accordance with the established procedures, the 
discussant had made available, in advance, outlines of the main issues he intended to raise.   
2. The Chairperson recalled the purpose of the Tr ade Policy Review Mechanism and the main 
elements of the procedures for the meeting.  The re port by the Government of Thailand was contained 
in document WT/TPR/G/123 and that of the WTO Secretariat in document WT/TPR/S/123;  the main 
issues raised by the di scussant were contained in document WT/TPR/D101.  Copies of advance 
written questions, submitted by 13 delegations (Switz erland; United States; Canada; Norway; Chinese 
Taipei; Colombia; Hong Kong, China;  New Zealand;  Japan;  European Union;  China;  Brazil;  and 
Australia) had been transmitted to the delegation of  Thailand.  Replies to these and other questions 
raised on the first day of the meeting are reproduced at Annex.  
3. The Chairperson had considered the reports prep ared for the Review and was encouraged by 
the steady recovery in Thailand's economy since its prev ious Review in 1999.  This recovery is partly 
due to the Government's own efforts involving ma croeconomic policy measures, trade liberalization 
and structural reforms.  But WTO Members had also played an important role in this recovery by 
keeping their markets open to Thai exports;  indeed , exports had been one of main sources of growth 
during the period under review.  As mentioned in the reports, further opening of the economy together 
with the continued pursuit of necessary structural reforms could help pave the way for the sustained 
growth of Thailand's economy in the future.  On Thailand's trade policy regime, while it remained 
committed to the multilateral trading system a nd had supported strongly the Doha Development 
Round, it had nonetheless decided to expand the scope  of its involvement in bilateral and regional 
agreements.  She noted from the Government Report that these initiatives were intended to 
complement the multilateral trading system;  she believed that Members would be interested in 
learning more about how the Government of Thailand hoped to accomplish this goal. WT/TPR/M/123 
Page 4  
 
II. OPENING STATEMENT BY THE RE PRESENTATIVE OF THAILAND 
4. The representative of Thailand
 stated that the Thai economy had moved into stagflation in 
1998.  The GDP growth had dropped from 5.9% in 1996 to -1.4% in 1997 and to -10.5% in 1998.  Several economic indicators had hit a ten-year low,  including export and import growth, net capital 
movement, domestic credit growth, and the 12-mo nth fixed deposit interest rate.  The supportive 
monetary and fiscal policies were partly responsib le for the economic recovery in 1999-00.  Both 
fiscal and monetary policies were eased to stimulate domestic demand and improve liquidity.  The easing of economic policies coupled with favorable e xports resulted in economic growth of 4.4% in 
1999 and 4.5% in 2000.   
5. In 2001, the economy had slowed, due notably to ex ternal shock.  On the whole, the economy 
grew by 1.9%, led by the domestic demand expa nsion of 3.1%, which corresponded to a large 
public-sector deficit amounting to 3.5% of GDP in FY2001.  This was because Thai exports in 
U.S. dollar terms contracted by 6.9% following a slowdown in the demand of Thailand's trading 
partners, in particular the United States and Japan.   
6. In 2002, a number of government measures that  had been introduced since 2001 bore fruit, 
assisted by a recovery in the external sector.  Th e 5.2% economic growth was largely supported by the 
4.4% growth in domestic demand, in line with th e Government's policies and the financial sector 
restructuring.  The recovery in the external sector was mainly attributed to the decline in net capital 
outflow that held up the baht against the U.S. dollar. 
7. In the first half of 2003, the Thai economy remained strong despite a number of external 
shocks, particularly the U.S.-Iraq war and the ou tbreak of Severe Acute Respiratory Syndrome 
(SARS) in Asia.  The impressive growth performan ce of the Thai economy was derived largely from 
the private sector, highlighted by private consumption, private investment, and exports.   
8. For the first seven months of 2003, the expor t sector had shown robust performance. Exports 
increased by 18.1% to US$44.6 billion, with computer s and parts, garments, integrated circuits, and 
rice as major exports.  Exports were forecast to grow  by 10.58% in 2003.  Imports were expected to 
reach US$41.4 billion, a growth of 14.57%.  Majo r imports into the country were electrical and 
industrial machinery, chemicals, and crude oil.  The Thai economy was expected to grow by between 
5% and 6%, with inflation between 1% and 2% in 2003.  
9. Thailand's export destinations were concentrated in a few markets;  the United States, the EU, 
Japan, and ASEAN made up almost 70% of the countr y’s total export value.  Exports to Thailand's 
secondary export markets, which cons tituted 14.5% of total exports, were likely to grow by 13.3%, 
with exports to Hong Kong, China rising 8.1%, Chinese Taipei 10%, South Korea 15%, Australia 
16.5%, and Canada 20%.  New e xport destinations, which represen ted 19.9% of the total export 
revenues, would also increase by 22.2%;  the Indochi na market could grow 19.9%, the Middle East 
11%, South Africa 8.8%, South America 9%, Eastern Europe 9.7%, South Asia 9%, and China about 
50%.  
10. The Bank of Thailand formally adopted an infl ation-targeting framework in May 2000 with 
the objective of ensuring transparen cy and efficiency.  The use of monetary policy to maintain price 
stability fostered investment and sustainable grow th.  The Bank of Thailand chose to target core 
inflation, which excluded volatile raw food and energy  prices, to move within the range of 0%-3.5%, 
which was consistent with inflation trend of Thailand’s trading partners and the structure of the Thai 
economy.  
11. In implementing monetary policy, the Bank of Thailand vested the Monetary Policy 
Committee (MPC), comprising the Governor, six Bank of Thailand executives and two advisers, with 
the power of setting the direction of monetary polic y in order to maintain price stability.  The MPC  WT/TPR/M/123 
 Page 5 
 
 
was also responsible for adapting the inflation- targeting framework.  Meanwhile, the system of 
managed float for the exchange rate coupled with inflation targeting worked well.   
12. A Dual Track Development Strategy had been intr oduced to create more balanced growth and 
to lessen Thailand's relative exposure to adverse exte rnal shocks. It was a new alternative to replace 
the pre-crisis, low-value-added e xport model – the single-track East  Asia Economic Model (EAEM) – 
which had been excessively dependent on FDI by multinational corporations (MNCs) and mass 
manufacturing.  Such a dual-track option involved th e simultaneous pursuit of certain types of mass 
manufacturing facilitated by FDI from MNCs, as we ll as the second track through the skill-driven 
small and medium enterprise model.  The new para digm aimed to lay a solid base for sustainable 
growth and stability by strengthening domestic  activities and promoting linkages between the 
domestic economy and the world economy.   Thailand re mained open to foreign trade and investment 
and was ready to integrate itself into the world economy.   
13. Thailand was supportive of a multilateral trading system and played a part in launching the 
Doha Development Agenda (DDA) that focused on th e development dimension of trade, and greater 
market access with transparent and fairer rules.  
14. With regard to investment, the Thai Govern ment was committed to improving the overall 
investment environment.  Thailand had sought to pr omote investment in high-value industries, namely 
agri-business, automobiles, fashion including tex tiles, leather and jewellery, and electronics.   
15. The industrial sector grew 9% in the third qua rter of 2002 compared with 6.8% in the second 
quarter.  At present, the Government, through the Ministry of Industry, placed importance on the sectoral industrial development with specific strate gies in each sector;  for global industries, i.e. 
highly competitive industries in the world market such as food, fashion (jewellery and textiles), 
automotive, and electrical and electronics applian ces, the specific strategy was to develop new 
products through R&D and create design, brand name , and country image;  and for  regional and 
domestic industries, i.e. fairly competitive industr ies in the world market such as agri-industry, 
chemicals, ceramics and glass, the strategy was to develop higher value-added in the value chain 
through R&D of Thai traditional knowledge, and t echnology transfer through linkage between large 
and small-scale industries and the cottage industry.   
16. Trade policies of Thailand, a small and open economy, had been geared towards promoting 
exports by limiting export controls to a minimum.  Thailand was restructuring tariff lines to further 
reduce applied tariff rates. At present, out of 5, 505 tariff lines, Thailand applied tariff quotas to 
23 agricultural products.  The average applied tariff was 14.61% for WTO Members and 16.84% for 
non-members. 
17. To increase its competitiveness, Thailand had initia ted the restructuring of the tariff regime 
and customs procedures. Thailand’s restructured ta riff system, which should be completed by 2004, 
would have three primary tariff rates: 1% for raw materials, 5% for interm ediate products, and 10% 
for finished articles.    
18. Thailand had adopted the WTO Customs Valuati on Agreement and thus the relevant rules 
under the Agreement were being applied.  An elect ronic data interchange (EDI) system had been 
established by the Customs Depart ment to reduce paper load.  
19. To increase competitiveness, the Ministry of  Agriculture and Cooperatives (MOAC) had 
undertaken research and development to apply the Good Agricultural Practice (GAP) method, i.e. the 
use of high yield crop varieties and proper fertilizer s.  In addition, the MOAC had set up the National 
Bureau of Agricultural Commodity and Food St andards (NBACFS), which was responsible for 
standardizing, inspecting, and certifying food and agricultural products.  In the meantime, the MOAC 
had already set up the standard for 14 agricultu ral commodities, such as longan, orchid, Hom Mali WT/TPR/M/123 
Page 6  
 
rice, lychee, and orange.  With the efforts of agri cultural development by the MOAC, the agriculture 
sector had been growing at an average rate of 3% an nually.  The agriculture sector would continue to 
play an important role as the main source of food  supply and labour employment for the economy.   
20. Investors’ confidence had been boosted by the political strength and stability derived from 
policy continuity.  The Government was continuing  with economic and financial reforms necessary to 
increase the competitiveness of Thailand in the l ong term.  The Alien Business Law of 1972 was 
superseded by the Foreign Business Act in 1999;  th e Act allowed more foreign participation in a 
wider range of activities such as brokerage services, wholesale and retail trade, construction, non-silk 
textile, garments, footwear industries, hotel, bevera ge production, and auction business.  Both Thai 
and foreign companies were eligible, on a non-disc riminatory basis, to apply for tax and non-tax 
incentives from the Government through the O ffice of the Board of Investment (BOI). 
21. Thailand's key state enterprises, including those in key industries such as telecommunications, 
transportation, and public utilities, were being co rporatized.  At the sa me time, new business 
opportunities and improved human resources, resulti ng from the dual-track development policy, had 
greatly enhanced Thailand as an attractiv e foreign investment destination.   
22. In the financial sector, banking and the capita l market had been strengthened by  all-
encompassing regulatory and institutional reforms pa rticularly in the spheres of prudential and 
corporate governance.  The market value of the St ock Exchange of Thailand had increased three-fold, 
from US$24 billion in 2001 to around US$82 billion currently.  Furthermore, the stock exchange index as of September 2003 had reached 660 points,  up from 304 points in 2001, reflecting vibrant 
economic activities including investment in the secondary market.   
23. The services sector had expanded continuously in recent years.  The sector accounted for 
about 55% of GDP and about 40% of employment in 2002.  However, the lack of methodological 
framework for statistical data collection was believe d to have resulted in an underestimation of the 
contribution of services to the economy.   
24. Although Thailand was a net importer of services,  it had begun to exhibit a fair level of 
international competitiveness in certain sectors such  as construction and related professional services, 
health services, and tourism services.  Thailand also  gave high priority to infrastructure services, i.e. 
financial, telecommunication, and transport services,  as they were inputs to all business activities.  
Achieving efficiency in these sectors would greatly support the good functioning of the economy as a whole. 
25. Precisely because of the existing gap between the current regulatory environment and 
business realities in the services sector, Thailand ha d been introducing regulatory reforms for several 
years.  The effort had resulted in the introduction of new laws, as well as ame ndments to existing ones 
in order to catch up with developments in services.   Liberalization was desirable only when the sector 
had in place an appropriate regulatory framework, a coherent package of legislation, and effective 
enforcement mechanisms.  The introduction of th e Telecommunications Business Act in November 
2001, for example, allowed more competition in the previously tightly regulated market.  The Act 
defined market access by types of telecommu nications licence, licensing scheme, network 
interconnection, rights of way, tariff regulati ons, universal service obligation, and foreign 
participation.  The National Telecommunications Commission, an independent body, was soon to be 
set up to regulate the telecommuni cations industry.  In addition, the Extraordinary Committee (an ad 
hoc legislative body) was deliberating on the propo sed amendment to increase the foreign equity limit 
from the current 25% to 49%. 
26. Meanwhile further steps had been taken in liber alizing the financial services sector such as 
the relaxation of foreign equity participation in the securities segment.    WT/TPR/M/123 
 Page 7 
 
 
27. Thailand recognized the importance of IP protection particularly in the area of copyright. It 
had dedicated considerable human and financial resources to eradicating the problem of piracy, both 
in the analog and digital means.  The Thai aut horities had introduced a package of legislation to 
protect IP rights. Thailand was stepping up its efforts to suppress IP piracy.  Equipment used to duplicate copyrights was subject to import licensing.  The number of confiscated pirated goods had 
risen to 2.3 million units in 2002.  During the first six months of 2003, almost 4 million units of 
pirated goods were confiscated.  The Royal Th ai Police had also removed CD machines from 
12 pirated CD  factories to the police warehouse in order to  eliminate further production and theft.  
Thailand was drafting a new law on optical disc manuf acturing control, to prevent the infringement of 
software and other copyright works in form of optical media. 
28. In an effort to increase the effectiveness and efficiency of the overall suppression of IPRs 
violation in Thailand, 13 government agencies had signed a Memorandum of Understanding on the 
Cooperation of Relevant Government Agencies rega rding the Enforcement of Intellectual Property 
Rights.  These agencies included the Royal Thai Poli ce, the Office of Consumer Protection Board, the 
Customs Department, the Revenue Department, the Excise Department, the Department of Industrial 
Works, and the Department of Foreign Trade. 
29. Public awareness remained one of the key challenges for long-term IP protection. 
Accordingly, Thailand had intensified its efforts to enhance awareness of the importance of IP 
protection.  Since the end of the Uruguay Round, Thailand had revised and en acted several laws to 
comply with the Agreement on Trade-Related Aspect s of Intellectual Property Rights (TRIPs).  Thus, 
the Thai Government had passed important legisla tion and amendments such as:  the Copyright Act 
B.E. 2537 (1994);  the Patent Act No. 3 B.E. 2542 (1999);  the Protection of Plant Varieties Act B.E. 
2542 (1999);  the Trademark Act No. 2 B.E. 2543 (2000);  the Protection of Layout Designs (Topographics) of Integrated Circuits Act B.E. 2543 (2000);  the Trade Secret Act B.E. 2545 (2002);  and the Geographical Indications Act B.E. 2546 (2003). 
30. Thailand had been and would continue to be  an active player in the multilateral trade 
negotiations. It had submitted a num ber of proposals in the areas of agriculture, rules, and DSU. 
31. As an economy where agriculture played a significant role, Thailand attached great 
importance to the WTO’s agriculture negotiations . The country was in favour of substantial 
improvement in market access, substantial reducti on of domestic support, a nd elimination of export 
subsidies.  
32. Thailand believed that bilateral/regional tr ade arrangements were complementary to the 
multilateral trade goals towards free trade.  The average tariff on intra-ASEAN trade had been 
lowered to approximately 3%. Thai exports to A SEAN had increased at the rate of 20% per annum 
since 1992.  
33. Thailand was firmly committed to effective im plementation of AFTA.  Currently, all product 
items (9,211) were under the CEPT scheme;  tariff rates on those items were  between 0% and 5%.  
Additionally, Thailand was committed to reducing 80 % of all tariff lines down to 0% in 2007.  After 
the completion of the CEPT scheme, Thailand wa s planning to work towards an ASEAN Economic 
Community (AEC) by 2020.   
34. In 2003, Thailand had hosted the Asia Pacifi c Economic Cooperation (APEC) and would be 
actively supporting the advancement of the APEC’s  work, as the APEC continued to enhance the 
WTO process.  The Meeting of APEC Leaders in October 2003 provided stro ng political impetus for 
progress in the DDA/WTO, significant particularly in  light of the negotiating impasse resulting from 
the Fifth WTO Ministerial Meeting in Cancun in September 2003.  WT/TPR/M/123 
Page 8  
 
35. The Asia-Europe Meeting (ASEM) was offici ally established in 1996 in Bangkok.  The 
principal goals of the ASEM were to establish a new and comprehensive partnership between Asia 
and Europe, to create favorable conditions for economic and social development of the two 
continents, and to maintain world peace and stabilit y.  The ASEM addressed three main pillars, i.e. 
politics, economics, and finance. 
36. Towards enhancing sub-regional economic ties with countries to its west, including South 
Asian countries, Thailand had adopt ed a "Look West" Policy a decade ago.  In 1997, the Declaration 
on the establishment of the Bangladesh-India-Sr i Lanka-Thailand Economic Cooperation (BIST-EC) 
was launched in Bangkok.  The membership was later extended to Myanmar.  The BIMST-EC had 
been intended to serve as a crucial link between the nations of South Asia and South-East Asia.   
37. Thailand was actively engaged in bilateral free- trade negotiations with many countries around 
the world, among which were Australia, India, Japan , Bahrain, People’s Republic of China, Peru, and 
the United States.  For Thailand, the multilateral trad ing system remained a priority.  At the same 
time, regional cooperation was seen as an important  instrument in complementing one another’s 
strength and cushioning regional economies from ex ternal shocks.  Thailand viewed free-trade 
agreements as a stepping stone towards free trade at the multilateral level as they allowed gradual 
increases in market access for FTA partners, while granting domestic industries time to adjust to the 
increased level of competition.   
38. Evidence showed that the dual-track policy w as working well for Thailand as a means to 
preempt any abrupt changes in future economic a nd trade policy directions.  The Government would 
continue its government-assisted programmes at the gr ass-roots level.  The efforts to strengthen the 
country and the region should not be construed as inward-looking policy;  Thailand’s remained open 
to foreign trade and investment.  Thailand recognize d that the country needed foreign investment and 
exports in order to thrive.  In tandem with ongoi ng efforts to build an entrepreneurial class and 
strengthen the domestic economy, in ternational trade policies would be implemented to help secure 
sustainable economic growth and improve the livi ng standard of Thai people.  Thailand was now 
working on all fronts – bilateral, regional and multila teral – to achieve meaningful market access for 
its goods and services. 
39. The Government had also emphasized the e nhancement of Thailand’s competitiveness. A 
National Competitiveness Committee (NCC) had b een established to develop strategies and 
implement measures to improve Thailand’s comp etitiveness.  As the country moved towards 
becoming a more knowledge-based economy, measures aimed at improving the education system, 
promoting innovation systems and R&D in firms, and investing in information communications 
technology (ICT) would be implemented.  The R oyal Thai Government would continue to pursue 
policies aimed at greater economic liberalization to gether with more sustained development at the 
grass-roots.  WT/TPR/M/123 
 Page 9 
 
 
III. STATEMENT BY THE DISCUSSANT 
40. The discussant  (Ambassador Seixas Corrêa) stated that following a period in which it had had 
one of the world's highest growth rates, in the 1980s and 1990s, Thailand had f aced a severe crisis in 
1997-98.  Capital flight, the loss of foreign reserves and a large depreciation of the Thai baht had led 
to a severe recession.  Real GDP had dropped 12%, unemployment had risen sharply, and the share of 
the population below the poverty line had also increased abruptly.   
41. Thailand had responded to the crisis by carryin g out a broad programme of economic reforms, 
including financial sector rehabilitation and trade and investment liberalization, which had helped to 
restore growth.  To address the problems of co rporate governance, Thaila nd had taken measures 
including enhanced accounting, disclosure, and auditing regulations. 
42. As a result, during the period under the review  (1999-03), Thailand’s real GDP had grown by 
4.4% in 1999, and 4.6% in 2000.  Despite a slowdown in 2001, to 1.9%, GDP growth had picked up in 2002, when it reached 5.3%.  At the same ti me, unemployment had fallen from 4.4% in 1998 to 
2.4% in 2002.  Since 2000, core inflati on had remained within the target range. 
43. The considerable surpluses of Thailand’s current account, the subs tantial reduction of its total 
external debt – from 93.2% of GDP in 1998 to 47% in 2002 – and its increased international reserves 
(almost US$40 billion) had contributed to reduce the external economic vulnerability of the country.  
However, public-sector debt remained high, largely as a result of the costs of financial restructuring 
and indebtedness of state-owned enterprises, including banks. 
44. Thailand had liberalized its trade and investment  regimes.  Applied tariffs had been reduced 
since 1999 – despite the still high incidence of non- ad valorem  duties and non-tariff barriers – and 
measures had been taken to improve customs procedur es and to attract foreign direct investment. FDI, 
however, had not reached the pre-crisis level, wh ich undoubtedly reflected global trends as much as 
the specificity of the Thai situation. 
45. Overall economic prospects for Thailand looked positive. The Ministry of Finance projected 
growth of approximately 5% for 2003, propelled by domestic demand and e xports.  However, the 
sustainability of Thailand's economic recovery de pended on continued macroeconomic stability and 
structural reforms, particularly fiscal consolid ation and public debt management;  these would 
contribute to restore the corporate and financial sect ors affected by debt and non-performing loans left 
after the crisis.   
46. The discussant asked what measures the Thai Gove rnment considered to be the most crucial 
for the continuance and sustainability of Thaila nd’s economic recovery, and what had been the 
influence of external factors on Thailand’s effo rts to reduce its external vulnerability.  Non-
performing loans, which had reached 45% of total loans during the crisis, significantly improved, to 
15.7% in June 2003, although this still represented a high proportion.  He asked to what extent this 
situation represented a drag on economic growth, an d what was the scope for a definitive resolution 
for this problem.  He also sought informa tion on how Thailand had c oped with the regional 
imbalances that had arisen as a result of different rates of growth and development within the country, 
especially between the Bangkok region and the North East 
47. Trade policy had not changed much since Thaila nd’s previous Trade Policy Review in 1999.  
The strengthening of the domestic economy and integr ation to the global economy were at the centre 
of the Government’s dual-track de velopment policy.  A major objective of Thai trade policy consisted 
in export growth, including the diversification of ma rkets and a move to higher valued products, with 
increasing participation of the private sector.   WT/TPR/M/123 
Page 10  
 
48. In order to achieve those objectives, Thailand had to rely on the multilateral trading system.  
As a competitive agricultural producer, it would have mu ch to gain from reform in agricultural trade.  
It therefore had a strong stake  in the successful conclusion of the D oha Round.  It was an original 
member of the Association of South-East Asian Nations (ASEAN).  Moreover, Thailand was seeking to negotiate a series of bilateral preferential trading agreements.  The discussant asked how Thailand 
saw its regional and bilateral trade initiatives in re lation to its commitment to the multilateral trading 
system.  He wondered whether the foreign trade au thorities, such as customs and sanitary authorities, 
were equipped to handle several di fferent import regimes simultaneously. 
49. Thailand's trade and investment policies had rema ined fairly liberal, with efforts made to 
facilitate trade and improve market access, partic ularly in customs valuation and foreign direct 
investment.  Tariffs continued to be an important  instrument, not only of fiscal but also of trade 
policy. Over a quarter of all tariff lines were unbound, which reduced pred ictability for Thailand’s 
partners as well as for Thai businesses.  Non- ad valorem  duties still accounted for 23% of all Thai 
tariff lines.  
50. In order to facilitate trade, Thailand had adopt ed the EDI (electronic data interchange) and 
had introduced an Internet-based customs declaration system.  Two laws had been amended in order 
to implement the WTO Agreement on Customs Valuation. 
51. Government procurement played a role in ec onomic policy, with preferences accorded to 
domestic suppliers.  Import licensing and other borde r measures seemed to have raised doubts in the 
Secretariat with regard to procedures and their motiva tion.  The Secretariat report also suggested that 
there was a lack of transparency in Thailand’ s tax incentives, which damaged public accountability 
and governance.  The discussant asked whether Thaila nd’s liberalization effort had contributed to a 
more competitive domestic market;  whether liberalization had led to a significant change in the structure of Thai exports;  what were the remaining barriers to trade;  and whether Thailand favoured specific sectors in using government procurement as an industrial policy instrument. 
52. Regarding agriculture, some Thai trade policy features could still be improved upon, such as 
non-automatic import licensing, existence of a sma ll number of tariff rate quotas and single desk 
export monopolies.  As to support to farmers, he no ted that Thai policies were mostly targeted to 
low-income and resource-poor producers. 
53. The energy sector was still the domain of state- owned providers.  Reform of the electricity 
supply industry was one of the Gove rnment’s policy priorities.   
54. Clothing was one of Thailand’s main sources of  industrial export revenue.  Under the WTO 
Agreement on Textiles and Clothing (ATC), exports of textiles and cl othing were restricted by quotas. 
Under-utilization of some quotas by Thailand might s uggest low international competitiveness or the 
effect of preferential agreements between its competitors and the major importers.   
55. Financial sector reform, contributing to a bette r stability and performance of the financial 
system, had been fundamental to Thailand’s recove ry after the 1997 crisis.  Thailand had unilaterally 
reformed some services, allowing higher foreign e quity limits in banking, which remained reluctant, 
however, to extend credit.  Severa l government institutions had been formed to help rehabilitate the 
financial sector, like the Asset Management Corpora tion (TAMC), which had been created to manage 
non-performing loans.  The discussant asked how a positive outcome in the Doha Round on 
agriculture, i.e. elimination of export subsidies and substantial reduction of  domestic support, would 
affect Thailand’s agricultural trade policy, particular ly in relation to border measures.  He asked the 
Thai delegation to provide any additional informatio n with regard to plans for reforming the energy 
sector and, in particular, any role e nvisaged for foreign energy suppliers.  WT/TPR/M/123 
 Page 11 
 
 
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 
56. Members noted and appreciated their close bilate ral relations with Thailand, particularly in 
regard to trade and investment.  Many Members indi cated that their bilateral trade and investment 
relationship had been strengthened since Thailand’s previous Review in 1999. 
57. Members welcomed Thailand’s economic recovery after the 199 7 Asian financial crisis, and 
commended the Thai Government for sound macro economic policies and reform measures, while 
resisting protectionist pressures and reinforcing its outward-oriented trade and investment policies.  
Members hoped that Thailand would continue and enhance its efforts to liberalize its trade and 
investment regime.   
58. Members appreciated Thailand’s active participa tion in and strong support for the multilateral 
trade system including the Doha Development Agenda and various committees.  Some Members 
congratulated Thailand for its successful hosting of the APEC meetings in 2003. 
59. Members looked forward to receiving answers to their written questions from Thailand. 
60. The representative of Japan  noted that several preliminary talks had been held on an 
Economic Partnership Agreement be tween Thailand and Japan.  Japan was following the progress of 
Thailand's FTA negotiations with other countries and WTO-consistency of these proposed FTAs.  
61. He noted that there was a high degree of unpred ictability in Thai tariffs because only about 
70% of all tariffs were bound, and the bound rates were considerably in excess of the applied rates.  
Japan asked Thailand to increase the number of its bound tariff lines, and urged to bind tariffs on 
transport equipment through the current WTO negotiations.   
62. Japan was concerned about the implementation of the Price of the Goods and Services Act 
and the Trade Competition Act, and the role that th ey played with the Central Commission on Price of 
Goods and Services.  Japan hoped that these comp etition laws were implemented in a fair and 
predictable manner, and that the Commission fully ca rried out its responsibility to maintain a fair 
competition environment.   
63. Japanese companies in Thailand suffered ser ious losses from imitated products.  He 
appreciated that the Thai Government had taken va rious actions to promote and enforce the protection 
of intellectual property rights (IPRs), such as through monitoring and carrying out raids on illegal 
operations, and hoped that Thailand wo uld continue such efforts to combat the infringement of IPRs.  
64. The representative hoped that Thailand, as one of  the major beneficiaries of the multilateral 
trading system, would maintain agricultural policies that were fair and fully transparent to other 
Members.   
65. On services, the Foreign Business Act of Tha iland labeled juridical persons having 50% or 
more foreign capital participation as a foreigner.  The representative hoped that this situation would 
be rectified.  As for financial services, he be lieved that the relaxation implemented in 1997 of the 
foreign equity limits was still effective;  this en abled foreign commercial banks to own shares up to 
100%.  He also hoped that Thailand would continue to  make efforts towards further liberalization in 
the area of insurance services.  
66. The representative of Switzerland  considered that the Thai Customs Administration had 
gained in transparency and efficiency.  Adherence to the Kyoto Convention could further contribute to 
progress made so far.  The fact that applied (a djusted) rates might be increased above WTO bound 
rates, and the apparent responsib ility of the importer to request taxation at the lower WTO bound rate 
seemed confusing.  He encouraged Thailand to look into the matter and remedy the complicated WT/TPR/M/123 
Page 12  
 
mechanism. In addition, the reasons for im posing specific product surcharges and their WTO 
justification were not clear.   
67. In some cases the conditions attached to impor t licensing appeared equivalent to quantitative 
restrictions.  Overall, the system of import licen sing tended to be opaque a nd complex.  Notification 
of the relevant import licensing legislation would contribute to full transparency. 
68. In the context of food safety and BSE, Tha iland was going beyond the recommendations of 
the competent international health organization.  He wondered about the justification of import 
prohibition in such cases, and requested further info rmation on the use and requirement of health 
certificates. 
69. The representative of the United States
 applauded Thailand’s ac tive role in promoting 
regional trade liberalization through APEC and th e ASEAN Free Trad e Area (AFTA).  Thailand had 
been an enthusiastic supporter of the AFTA pr ocess, through which ASEAN members had phased out 
tariffs a year ahead of schedule.  It had also been a strong advocate of ASEAN integration, which 
would serve to enhance the attractiveness of the co untries in the region as destinations for trade and 
investment. 
70. The United States and Thailand agreed in 2002 to  enhance their trade relationship through the 
signing of a Trade and Investment Framework Agreement.  The leaders of the two countries announced in October 2003 their intention to negotia te a bilateral free-trade agreement in accordance 
with the procedures specified by their respective legislatures. 
71. Thailand had relatively high tariff rates, particularly on agricultural products;  the 
representative looked forward to hearing what steps Thailand was considering in this area.  She was 
also interested in hearing whether Thailand was planning to reduce the tariffs it had increased on 
several products, including autos, in the aftermath of the financial crisis.  She urged Thailand to 
remove non-tariff barriers, including licensing, regi stration and other requirements, which were non-
transparent, restrictive, and trade distorting.  
72. She commended Thailand on the steps it had take n in 2002 to strengthen intellectual property 
protection and urged it to continue to make progress in  this area.  She believed further comprehensive, 
coordinated, and sustained efforts in this area were  necessary, and was interested in any legislative, 
judicial or enforcement steps the Thai Government anticipated. 
73. She also welcomed the steps that Thailand ha d made to improve its customs regime, and 
requested information on how the Government inte nded to implement the recent amendments to its 
customs laws and to the Customs Valuation Agreement. 
74. She urged Thailand to end its involvement in promoting certain sectors, and asked for 
Thailand’s comments on privatization under considera tion.  She also urged Thailand to eliminate 
remaining service-sector barriers, including in financial services, telecommunications, energy, transport, professional, and asked whether Thaila nd was considering accession to the Government 
Procurement Agreement.   
75. The representative of Canada 
noted that more than 25% of Thailand's seven-digit tariff lines 
remained unbound.  Canada was concerned that this situ ation could lead to a lack of transparency and 
also to uncertainty for traders and investors, and encouraged Thailand to consider the potential 
benefits of binding its remaining tariff lines. 
76. There had been a general decline of average MFN tariffs since 1999, while there were high 
tariffs on some agricultural product, such as feed peas.   Thai farmers would not be adversely affected 
by a decrease in tariffs on feed peas, which was not  domestically produced.  Rather, Thai farm-animal  WT/TPR/M/123 
 Page 13 
 
 
producers would benefit from lower feed costs.  He requested an explanation of why Thailand 
maintained the high tariff on feed peas and whether there were plans to reduce it.   
77. He was interested in learning more about Th ailand's Master Plan for Telecommunications 
Development.  There appeared to be delays in th e establishment of an independent regulator.  He 
requested an update on the status of the selection process and a time-line for the establishment of the 
National Telecommunicat ion Commission.   
78. The representative of Norway  hoped that Thailand would bind mo re of its customs tariffs on 
goods (including fish) to the corresponding applied ra tes.  This would increase predictability.  He 
believed that, based on Thailand's strong economic  performance, the country would benefit from a 
reduction in duties for industrial products. 
79. The general increase in the use of anti-dumping actions among Members, both in the number 
of actions taken and the number of counties resorting to the instrument, was of concern to Norway.   
The present anti-dumping rules contained weaknesses and some of the provisions lacked clarity that had led to abuses.  Stricter rules for the use of anti-dumping instruments were therefore a main priority for Norway in the WTO negotiations and an objective shared by the FAN's group in which 
Norway and Thailand participated.   
80. Thailand was apparently in the process of maki ng key decisions on several regulatory issues 
that were vital for the future development of its telecommunications sector.  He  believed that 
Thailand would benefit from making the transition to a non-discriminatory and transparent regulatory 
regime for the telecommunication sector as soon as possible.  Specifically, by abolishing limitations on foreign ownership and monopolist privileges, Thailand would create a better environment for 
attracting investments to the sector.  This woul d also contribute to continued economic growth, 
stimulate increased competition, and thereby bring better and cheaper telecommunication services.  
He asked about the current timetable for the liber alization of the telecommunications market in 
Thailand and when the concession contracts for privat e operators would be converted into licences.  
He also requested information on the conditions an d possible restriction on participation by foreign 
registered vessels in transports of cargoes ow ned or financed by government agencies.    
81. The representative asked whether taxation measure s that stimulated the use of Thai flag 
vessels had been removed, and requested inform ation on bilateral agreements containing 
cargo-sharing clauses.  He also requested informa tion on the percentage lim itations on foreign equity 
in companies that registered vessels under Thai flag and were engaged in domestic maritime transport.    
82. The representative of Chinese Taipei
 was particularly concerned about Thailand's safeguard 
measures against steel imports, its high levels of tariff on processed food products, and the regulations 
applying to foreign banks operati ng in Thailand, and looked forward to responses to relevant written 
questions submitted. 
83. The representative of Hong Kong, China  stated that bilateral re lations between Thailand and 
Hong Kong, China on investment would be further strengthened with the coming conclusion of the 
Thailand-Hong Kong Investment Protection and Prom otion Agreement.  He commended Thailand for 
implementing a series of tariff reductions since 1999.  Nevertheless, there was room for Thailand to 
further improve its tariff regime.  Tariff rates we re still fairly high, with the average bound rate at 
28.4% and average applied rate at 14.7%.  About 47%  of tariff lines were subject to applied tariffs 
above 10%.  There were also wide gaps be tween the bound and the applied rates.  Non- ad valorem  
tariffs, applied to about 23% of tariff lines, introdu ced some unpredictability to the tariff regime.  
Tariff escalation was significant in a number of sectors such as food products, textiles, leather 
products, wood products, and paper products. He encouraged Thailand to keep up its efforts in 
improving its tariff regime, particularly on these aspects. WT/TPR/M/123 
Page 14  
 
84. Thailand imposed import restrictions on a number  of products;  some of these licensing or 
prohibition measures were applie d for economic reasons, such as to  protect infant and domestic 
industries.  Furthermore, the Board of Investment could request the Ministry of Commerce to ban the import of goods that competed with those produced domestically.  He considered that import licensing 
and prohibition measures should not be applied fo r protectionist purposes, and urged Thailand to 
review these measures with a view to libe ralizing the restrictions concerned.   
85. The representative of Indonesia, speaking on behalf of ASEAN
 noted that Thailand recorded 
a substantial trade surplus in services, whose share in GDP was 3.9% in 2002, due mainly to 
transportation and tourism.  Few developing countries enjoyed a surplus in its services account.  
Thailand had unilaterally reformed various service sectors.  There were greater FDI inflows and 
further liberalization.  Foreign equity limits in  the banking sector had been increased and there was 
greater private-sector involvement in the transport sec tor, including the envisaged sale of 23% of Thai 
Airways International.  He also applauded steps ta ken by the Government of Thailand to abolish most 
local-content and export-performance requirements, including those attached to incentives for new 
investment.  This signalled the more proactiv e approach the Government was taking towards 
industrial policy and the pursuit of improved comp etitiveness.  Customs procedures had also been 
improved. 
86. The representative of New Zealand  welcomed Thailand's reforms in the financial sector, 
competition and investment environment, and corp orate governance.  While Thailand's dual-track 
policy was aimed at providing the highest standards of living possible to the people of Thailand, 
trade-distorting policies could pose a risk to sustai nable development.  He encouraged Thailand to 
ensure that resource allocation reflected the country 's comparative advantage and delivered the best 
possible outcome to consumers. 
87. He believed that one of the best means of  alleviating poverty was through greater 
liberalization of world trade, particularly trade in  agricultural products, whic h tended to dominate the 
production output of the world's poorest people.  The resumption of negotiations under the DDA, and 
an ambitious outcome on agriculture in all three p illars of market access, domestic support, and export 
subsidies, could act as a significant catalyst for achieving further growth and development for many developing countries. 
88. He considered that there was scope for the Th ai economy to further realize its potential by 
extending reforms to all sectors of the economy, including agriculture, where tariffs remained 
disproportionately high. 
89. In the area of regional trade agreements, Thailand was playing a pivotal role in the Asia 
region.  New Zealand supported such agreements  as important building blocks for a more open 
international trading system, and agreed that they c ould be an effective catalyst for liberalized trade, 
provided that they were consistent with WTO pr inciples and were a complement, rather than a 
substitute, for the multilateral system and APEC's  Bogor goals.  He looke d forward to beginning 
negotiations with Thailand on a closer economic partnership. 
90. The representative also mentioned the usefuln ess of the Trade Policy Review Mechanism in 
promoting discussions with regard  to regional integration, the relationship between openness and 
external shocks, and capital market supervision.   
91. The representative of the European Union
 noted that the short-term challenges had been 
discussed during Thailand’s last Trade Policy Review  in 1999;  most of these challenges had been 
dealt with.   Thus, it seemed more appropriate to address in the current Review the medium and long-
term challenges faced by Thailand.  WT/TPR/M/123 
 Page 15 
 
 
92. The core of Thailand’s current challenge was how to ensure growth and sustain the positive 
path of development in the long-term.  Global, regional, and bilateral trade was important for 
achieving this goal.  However, as long as a number  of domestic policies re mained as obstacles to 
trade, such further liberalization would only cast partial benefits.  Con sequently, Thailand should 
proceed with removing such obstacles while promoting systems and frameworks that could ensure 
benefits for the people of Thailand at large.   
93. A number of sectors of the Thai economy would be nefit from further liberalization. Thailand 
should also increase administrative capacity to en sure implementation of agreements and domestic 
reforms.  A strong administration could ensure that  reforms and regulations were carried out in the 
interest of Thailand at large and not individual companies affiliated with the administration.  
94. Thailand would benefit greatly in the long r un from further improving its external trade 
regime e.g. through greater tariff transparency, intr oduction of competition laws  and simplification of 
investment laws.  It was of cons iderable importance that Thailand re spect its obligations to end export 
subsidies on industrial goods, in line with the SCM Agreement.  
95. Thailand had been a great promoter of trade-lib eralization;  it had been strongly committed to 
do so in ASEAN, ASEM and APEC, and in its bilate ral relationship with the EU.  These bilateral and 
regional trade arrangements, compatible with th e rules and obligations of the WTO, were an 
important tool for promoting trade also among deve loping countries;  they would become beneficial 
for continuing growth and developm ent in Thailand.  However, they could not replace the benefits of 
global trade and the need for continuing liberalizati on in the context of the WTO in order to globally 
combat and alleviate poverty in all developing countries. 
96. A number of issues in the Doha Development Age nda would be truly beneficial for Thailand.  
Agreements on government procurement and trad e facilitation as well as investment and competition 
would be of great value to Thailand;  agreemen ts on government procurement and trade facilitation 
would help the government to strengthen its admini strative capacity and ability to carry out its trade 
policy;  agreements on investment and competiti on would, among many benefits, provide a global 
framework for Thailand for increasing foreign in vestment and for initiating work on competition 
policy, which was vital to ensure a strong market  economy in the long run.  Thailand would also 
benefit from liberalization for both industrial and non-industrial products as well as services. 
97. A number of developing countries were substan tially poorer than Thailand and were not on 
the same path of development.  These countries might require greater preferences and assistance to 
adhere to or even to participate in global trade for a truly limited gain.  He hoped that Thailand would 
do its utmost to ensure that least developed countri es were given a fair chance to engage in global 
trade.  In this regard, he was pl eased that Thailand lately, together with other countries, had restated 
its wish to address the global needs of countries mu ch less developed and in a much more difficult 
situation. 
98. The representative of China  welcomed Thailand's further abolition of licensing measures for 
some imports and exports, and streamlining and sp eeding up of its customs clearance procedures for 
certain products since its previous Review in 1999.   Thailand was leading the negotiations on China-
ASEAN Free-Trade Area, and the Governments of Ch ina and Thailand had agreed to establish a Joint 
Committee on Trade, Investment and Economic Cooperation at the level of Deputy Prime Minister. 
99. The representative of Brazil  commended Thailand's ambitious do mestic reforms, specially the 
restructuring of its financial sector and the strengthening of the institutional framework.   
100. The representative of Australia  complimented Thailand on the early repayment in 2003 of its 
outstanding obligations to the Internationa l Monetary Fund (IMF) under the 1997 Stand-By 
Arrangement.  Negotiations with Th ailand on a bilateral free trade agre ement, the Australia Thailand WT/TPR/M/123 
Page 16  
 
Closer Economic Relations Free Trad e Agreement, were concluded in October 2003.  Australia would 
continue to work closely with Thailand in many international fora, including in APEC, the Cairns 
Group and the Global Sugar Alliance.  Australia and Thailand shared a strong commitment to 
securing comprehensive agricultural trade reform.  He hoped that the momentum generated by 
Thailand's economic reforms would be reflected in a willingness to embr ace ambitious outcomes 
across all of the market access elements of the Doha mandate, especially services and non-agricultural 
market access.   
101. The representative of Colombia
 noted his country's shared interest and concerns with 
Thailand in various areas of negotiation, especially in agriculture.  The institutional restructure and 
measures targeted at improving Thailand’s produc t competitiveness were moving forward.  Advances 
had been made in reforming the tariff structure.   He wished to know more about institutional 
experience in Thailand and the various regimes th at had come out of different commitments at 
regional, bilateral a nd multilateral levels. 
102. The representative of India  was encouraged to note the successful stabilization of the 
economy following reforms.  The Asian financial cris is of 1997 had posed an enormous challenge for 
the country:  several economic indicators had reached th eir lowest levels in ten years, the GDP growth 
rate had dropped from 5.9% in 1996 to -0.5% in  1998.  The dual-track approach, combining a 
renewed emphasis on strengthening the economic funda mentals and reinvigorating the social sectors, 
while simultaneously retaining the outward thru st of the economy, to benefit from competitive 
synergies globally, had led to quick economic recovery.   
103. The Trade Agreement of 1968 currently provided a broad framework to govern the trade 
relations between the two countries.  There was also a Joint Business Council (JBC), which provided 
a forum for the business communities of  the two countries to maintain a continuous dialogue.  They 
were also engaged in the process of creati ng a deeper bilateral trade agreement.  
104. The representative of Argentina  appreciated Thailand’s continuous efforts for trade 
liberalization and facilitation, particularly with rega rd to customs valuation.  However, it would be 
desirable for Thailand to further simplify tari ffs, increase tariff bindings, reduce bound and MFN 
applied rates, and ensure greater transparency with regard to the import licensing regime.  In regard to 
Thailand’s plans to eliminate barriers to invest ment as well as local-content and export-performance 
requirements, he asked for comments from the Thai authorities.   
105. Argentina shared Thailand's goal of achieving a multilateral trading system based on rules 
that guaranteed market access to promote econom ic development and employment, and, among 
others, efforts to liberalize agricultural trade and elimination of subsidies and domestic support.  He 
hoped that these would not be replaced by new obstacles that might weaken WTO rules.   
106. The representative of Hungary  complimented the Thai Government for its commitment to 
openness and the structural reforms unde rtaken to facilitate foreign trade and the investment.  In 2002, 
Hungarian exports to Thailand amounted to US$28 m illion while Thai exports to Hungary were at 
US$256 million;  he hoped to decrease this imbalance and was interested in further liberalization of 
Thailand's import regime and in the decrease of MF N tariff rates, especially on agriculture, where 
there was relatively high tariff protection in selected  foodstuffs.  He asked for further information 
regarding the completion of the restructuring of th e tariff system of Thailand, and the reasons for 
delay in its implementation.   
107. The representative of the Czech Republic  stated that Thailand’s economic vulnerability to 
international factors had declined and Thailand’s sh are in major export market s was relatively stable. 
However, the corporate and financial sectors were sti ll burdened by debt and loans left after the crisis. 
Excess capacity in manufacturing remained as a resu lt of over-investment in the past.  Further 
opening of the economy would help to finish struct ural reforms and install macroeconomic stability.    WT/TPR/M/123 
 Page 17 
 
 
108. Trade and investment liberalization was an im portant part of the Thailand Government’s 
approach, aimed at strengthening the economy;  it helped to improve competitiveness, promoted 
economic growth, and alleviated poverty.  In comp lementing multilateral liberalization, Thailand as 
an APEC and AFTA member was engaged in regional  trade liberalization and developed its bilateral 
trade agreements and free-trade area in the framework of regional trade links.  Restrictions on foreign 
direct investment in some activities had been re duced and the investment regime of Thailand was 
viewed as generally liberal. 
109. Thailand seemed ready to contribute to the pro cess of further liberalization, covering also 
trade in agricultural products. This was a very encouraging sign, as the Thai tariff protection of 
selected agricultural products rema ined relatively high.  On average, it was 25.7% and was much 
higher than the average applied tariff for non-agricultural imports.  
110. As for some selected manufacturing sectors, Thailand had refrained from introducing new 
means of import protection.  However, tariffs on cer tain industrial products had been increased.  In the 
energy sector, monopoly of state-owned enterprises did not provide sufficient incentives for improvement of productivity. 
111. The representative of the Slovak Republic
 stated that Thailand was committed to trade and 
investment liberalization as a means of improving competitiveness and thereby promoting sustainable 
economic growth and alleviating poverty;  this was the best way to achieve these goals.  While 
international factors would continue to influe nce Thailand's growth prospects, through export 
performance and capital inflows, the maintenance of  fiscal discipline and further improvement in 
market access as well as progress in privatization and regulatory reforms were  required if recovery 
was to continue. 
112. The tariff remained the main instrument of Tha iland's trade policy, with a relatively high level 
of protection.  Thailand's MFN tariffs were high by regional standards, with the average MFN tariff 
rate at 27.2% for industrial goods and at 33.1% for agricultural products.  The tariffs in agriculture 
presented a contrast between the Cairns Group liber alizing approach to agriculture trade and the 
relatively high tariff protection of selected foodstu ffs.  Furthermore, 26.1% of the tariffs were 
unbound, and the bound rates were often higher than app lied rates;  this could imply a high degree of 
unpredictability in tariffs.  He wished to encourage Thailand to pursue a more liberal regime in this 
area. 
113. Thailand's system of import licensing appeared to be cumbersome, and, in some cases, 
equivalent to quantitative restrictions.  He asked  whether import restrictions for economic purposes 
had had a positive impact on Thailand's development. 
114. The representative of the Republic of Korea  commended Thailand for its pursuit of its 
economic reform programme;  the efforts by the Thai Government to reinforce the increasingly 
outward-oriented trade regime had been the key to the revival of growth after the 1997 Asian financial 
crisis. 
115. Thailand maintained anti-dumping duties on six products from WTO members including the 
Republic of Korea.  He hoped that Thailand woul d be cautious about using anti-dumping measures, 
given the damage to foreign exporters.   WT/TPR/M/123 
Page 18  
 
V. REPLIES BY THE REPRESENTATIVE OF THAILAND AND ADDITIONAL 
COMMENTS 
116. The replies by the representative of Thailand
 were divided into three main themes:  economic 
environment, trade policies by measure, and sectoral issues.  They were based on written responses, which were circulated to Members.  Thailand woul d provide answers to any outstanding questions at 
a later date.  Following the replies, the Chairperson opened the floor to TPRB members for further 
comments and questions.   
(i) Economic environment 
117. The representative of Thailand
 stated that, regarding the influence of external factors on 
Thailand's policy initiatives, Thailand’s policy had always been outward looking and such exposure 
had been one of the factors that had adversely a ffected the vulnerability of Thai economy.  The 1997 
financial crisis was the starting point that led to immense and long-term reforms in the financial sector 
in the areas of monetary policy, supervision of  financial institutions, corporate governance, and 
internal risk-management. 
118. Against the backdrop of higher level of compe tition in the world market and limited growth 
prospects in the latter part of the 1990s, Tha iland's trade policy had shifted towards expanding its 
traditional markets and seeking new markets fo r Thailand's exports as well as improving its 
competitiveness.    
119. Recently, the validity and effectiveness of the Th ai Government’s economic policies had been 
tested to the extreme by a series of international events that had severely hampered its efforts for 
recovery.  The unfortunate and terrible 11 Septem ber incident followed by the Bali bombing had 
shaken investor confidence, and the subsequent outbreak of SARS and the Iraq War had further 
worsened the trade and investment environments in the region.  
120. As a response to such events , the current administration ha d initiated several key policies 
aimed at rejuvenating domestic demand to offset gl obal economic slowdown, which also had affected 
the local economies.  Most crucial for continued and sustained economic growth was the Dual Track 
Development Policy, in which domestic-led growth, focusing on tackling poverty, rural development, 
and strengthening grass-roots local economy, w as coupled with an open-trade regime.  
121. As such, Thailand’s effort to limit the exposure to  adverse external forces could be reinforced 
by the Asian Bond Market Development Initiative to promote stable and efficient financial markets 
within the region.  
122. Equally important was the country's continued active engagement in the multilateral trading 
forum.  Therefore the reinvigoration of the Doha Round negotiations was on top of the policy agenda. 
123. On the concept of domestic-led growth, the dua l-track policy actually promoted coexistence 
of social objectives and capital management, thus aiming to enhance Thailand’s comparative advantages in the advanced sector and, at the same time, strengthening and improving economic 
livelihood of rural and resource-poor producers.  
124. Initiatives within the dual-track policy aimed at distributing the benefits of economic 
development to the rural areas included:  the "O ne Tambon One Product" (OTOP)  (a Tambon was a 
rural community bigger than a village);  revolving  village funds;  farmers' debt moratorium;  and 
suspension of interest payments for a period of three years for small-scale farmers and the like. 
125. It was these encompassing measures that would create new entrepreneurial activities in the 
rural areas and thus narrow the income distribution ga p between urban and rural areas, particularly in  WT/TPR/M/123 
 Page 19 
 
 
the North-East region of Thailand.  The take-up of the village funds was large in the North-East where 
almost two thirds of the poor lived.  It was very encouraging to see that the poverty headcount in the 
North-East fell from 28.1% to 17.9% between 2000 and 2002. 
126. On public management, the Public Debt Mana gement Office (PDMO) was established in 
1999 to ensure a coherent management of public debt.  The Office was tasked to formulate an overall 
policy on public debt management, oversee and manage  risks, issue and manage debt instruments, and 
set up an information database for public debt management.   
127. The Public Debt Management Office would seek  loans in response to government policy and 
manage public debt based on borrowing cost minimi zation within an acceptable risk profile.  The 
Office also attempted to promote not only the effi ciency of fund-raising and competitiveness of the 
country in the international capital market but also acceptance of the country’s credit rating.   
128. Thailand’s economic expansion, as evidenced by a 5.3% GDP growth in 2002 and an 
expected growth for 2003 of around 5%-6%, con tinued, despite the existence of remaining non-
performing loans (NPLs) within the system. Furtherm ore, financial institutions had already returned 
to profitability since 2001.  The majority of rema ining NPLs within the sy stem was already in the 
court process.  However, the court process remain ed slow due to such factors as: insufficient 
resources within the courts to adjudicate the high number of cases;  and the ability of debtors, under the foreclosure law, to delay the foreclosure proc edure by rejecting the appraised value of their 
collateral.  As a response to the latter, the releva nt authorities were in the process of amending key 
laws and regulations in or der to speed up the foreclosure process by  allowing the debtor to reject the 
appraisal value only once.  
129. In terms of non-performing assets (NPAs), the au thorities were in the process of deliberating 
ways in which the state-owned Asset Management Corporation (AMC) could purchase assets from commercial banks and other AMCs, thereby fu rther lessening the NPA burden of financial 
institutions.   
130. The discussant
 commended Thailand's position as a role model for developing countries faced 
with a similar situation in respect of how to  implement policies for stabilization and further 
development as well as harmonization.  He asked fo r Thailand's view on the question of FDI flows, 
which had also been an important element in an y development and in a stabilization process.  He 
asked whether Thailand believed that the multilate ral framework for investment that had been 
discussed in the WTO would be an important tool for this?   
131. The representative of Thailand  replied to the discussant that the country participated quite 
actively in the discussion related to investment in the working group on investments.  What was very 
important to developing countries was that there n eeded to be a balance between calculations for the 
host countries and for the investors.  If such ba lance existed, it would be a help for developing 
countries. 
(ii) Trade policies by measure 
132. The representative of Thailand  stated that although Thailand's priority was to push towards 
progress in the multilateral trading negotiations, FTAs  c ould be an effective catalyst for free trade as 
well as an essential building block for the multilatera l trading system.  In this manner, Thailand 
actively sought to ensure that the FTA arrangement s were consistent with WTO provisions so as to 
benefit the WTO process and Members as a whole.  Thailand ensured that in formulating these FTA 
negotiations, the principle of "substantially all trade"  stipulated in the relevant provisions of the WTO 
Agreements would be adhered to.  All goods were to be included  in the negotiations, with few 
exceptions. WT/TPR/M/123 
Page 20  
 
133. In the long run, trade liberalization had change d the structure of Thai exports in that it 
increased the percentage share of industrial exports  in total exports at the expense of agricultural 
exports.  Perhaps trade liberalization in the past had been focused on industrial products rather than on 
agricultural products in a meaningful way.  She hoped that agricultural trade liberalization under the 
DDA would be substantial enough to catch up with that  in industrial sector;  she also hoped that  the 
conclusion of the DDA would help Thailand to c oncentrate on the production and exportation of 
products in which it had comparative advantage, and import more products in which it lacked such 
advantage, for example, soya bean, wheat, dairy pr oducts, and meat.  Anothe r interesting development 
through trade liberalization was that the proportion of the services sector to the GDP had increased 
markedly and particularly those in which Thailand possessed comparative advantage, such as tourism, 
transportation, and newly developed healthcare servic es.  She was hopeful that the implementation of 
the DDA might result in higher percentages of agri cultural and services exports in Thailand’s total 
exports.   
134. With regard to the issue of the Thai authorities' capacity in handling several import regimes 
simultaneously, it had to be admitted that a certain degree of difficulty could be experienced by the 
relevant agencies in implementing various regimes due to lack of skill and experience, especially 
during the first year of implementation.  This incl uded insufficient infrastructure in terms of hardware 
and software.  However, over time, with techni cal and financial assistance, Thailand could 
successfully overcome these structur al obstacles and inadequate institu tional capacity.  The issue of 
an increasingly harmonized SPS regime, coupled with 0% tariff with Thailand ’s FTA partners, could 
with time simplify and alleviate institutional cap acity concerns for both sanitary and customs 
valuation authorities.  
135. On customs procedures, Thailand had made every effort to ensure that not only regulations 
the passed under the Thai legal infrastructure but also the practical implementation of those regulations were carried out in an effective manne r, consistent with its commitments under the WTO. 
136. With regard to tariff bindings, Thailand suppor ted 100% tariff binding on industrial products 
under the DDA negotiations.  The average high tariff rates on Thai agricultural products were 
necessary to ensure the level playing field as the major developed countries were still hesitant to 
eliminate their export subsidies and trade-distorti ng domestic supports.  The agreement on substantial 
agricultural trade reforms under DDA would definitely  make it possible for Thailand to substantially 
improve its market access for agricultural imports.   
137. With respect to non- ad valorem  duties, Thailand supported the conversion of all non- ad 
valorem  into ad valorem  duties for all products, both agricultural and non-agricultural.  She wished to 
point out that the change of HS  1996 to HS 2002 had produced th e unintended effects of increasing 
the proportion of tariff lines with non- ad valorem  duties to the total, while in reality, it had not 
increased the utilization of non- ad valorem  rates of duty. 
138. Thailand aimed to use export licensing as a means to protect its environment and scarce 
natural resources, and not as a tool to prohibit trade.  
139. As an export-oriented economy Thailand’s policy was to limit measures affecting exports to a 
minimum.  However, it had to maintain certain e xport-related measures in order to monitor the flow 
of certain strategic goods, as well as to pr otect its exhaustible natural resources. 
140. On government procurement, public sector refo rm in 2002 had resulted in major changes to 
government structure and responsibilities. As a r esult, responsibilities for government procurement 
had been transferred to the Ministry of Finance,  which planned to develop a Public Procurement 
Management Master Plan be considered within 200 3 by the Government.  This would be used as a 
framework to improve government procurement as a whole, including improvements in transparency  WT/TPR/M/123 
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and open effective competition, the concept of va lue for money, accountability and due process, as 
well as non-discrimination. 
141. On IPR, Thailand realized the importance of making progress in eradicating the problem of 
piracy as well as increasing public awareness in or der to ensure sustainable success in intellectual 
property protection.  For questions on legal, educa tive and enforcement arenas, as well as future plans 
for sustaining the momentum of the programmes, the representative invite d Members to refer to 
Thailand’s written answers for a more detailed explanation.   
142. The discussant  stated that Thailand was addressing in a very balanced way what had been the 
present tendency to see an ideal situation between the multilateral trading system and bilateral or 
regional trade agreements.  As Members had experienced difficulties in effectively launching the 
Doha Round negotiations, this ques tion was very much on the agenda;  many countries were looking 
for arrangements or solutions in the regional sphere or bilaterally to energize their trade, while the 
Doha Development Agenda remained a sort of a qu estion mark in terms of the original time table. 
143. Multilateral and bilateral/regional systems were  sometimes considered as alternatives.  
However, what the Thai Government was pursu ing was to encourage them to be perceived 
complementary.  They were mutually supportive because a multilateral system without a network of 
underlined trade agreements, both in the regional a nd bilateral spheres, would lack dynamism and 
would tend to be minimalist in many respects.  A system where dynamism was generated by bilateral 
or regional trade blocks without an overarching multilateral trading structure would not necessarily 
lead to further trade liberalization but might even lead to certain protectionist attitudes and to trade 
conflicts.  If there were trade conflicts in a cont ext where the multilateral sphere was weakened, there 
would be less capacity for the settlement of dis putes.  A good balance between the multilateral and 
bilateral/regional systems was therefore necessary. 
144. The representative of China  requested clarifications on one question on SPS, and wished to 
exchange views bilaterally for a better understanding between the two countries. 
145. The representative of the United States  noted that some U.S. questions particularly on food 
product registration and requireme nt, were apparently not answ ered, and asked Thailand for 
clarification.   She also had questions on the Cust oms Department's acceptance of the declared value 
in invoice as the transaction value, and under what circumstances this was not  deemed acceptable.  
She requested further clarification on where Thailand deviated from the rule of transaction value.   
146. The representative of Thailand  stated that the questions raised  by the United States were very 
detailed;  the two countries’ customs officials were having discussions and Thailand was ready to 
explain to the United States in detail to the extent possible. 
(iii) Sectoral issues   
147. The representative of Thailand  stated that agreement on substa ntial agricultural trade reform 
under the DDA would help Thailand improve measures not conducive to trade, as it would have less 
pressure to protect its uncompetitive products.  With hi gh trade distortions in world agricultural trade, 
Thailand could not be certain in wh ich products it had or did not have comparative advantage.  For the 
time being, Thailand was obliged to implement faith fully the existing Agreement on Agriculture.   
148. Thailand had been and would be an active par ticipant in services negotiations. Consequently, 
Thailand was committed to further liberalization in several services sectors.   
149. The overall objective of Thailand’s energy strategy was to integrate its four aspects:  the 
Strategic Plan for Energy Efficiency;  the Stra tegic Plan for Renewable Energy Development (New 
Options for Thailand);  the Strategic Plan for Energy  Security Enhancement;  and the Strategic Plan WT/TPR/M/123 
Page 22  
 
for Thailand to be the "regional energy centre", so  as to strengthen the security of the national energy 
supply and to increase Thailand’s competitiveness. Give n Thailand’s geographical advantage, existing 
large-scale domestic energy market and expertise in energy sector, existing energy capacity and 
infrastructure, and opportunities to expand energy tr ade to other countries within the region, Thailand 
had the opportunity and capacity to function as the regional energy centre.  Being the regional energy 
centre would contribute to Thailand’s access to ener gy supply and hence reduce the risk of supply 
disruptions.  Some of the measures associated with this objective included:   
(a) Reviewing the taxation system and structure to eliminate duplication of tax collection 
and barriers to oil trading, and establishing th e free zone (FZ) to facilitate overseas oil 
trading in line with international standards. 
(b) Developing the power transmission network, the natural gas pipeline network, and the 
networks for other energy types, includi ng international coopera tion and cooperation 
between public and private sectors, and g overnment to government collaboration so 
as to create joint-ventures in natural r esource development and efficient joint-
utilization of energy infrastructure, especially in the power generation and 
distribution. 
(c) Developing the "strategic energy landbridge" in southern Thailand linking the oil 
production sources and oil transportation fro m the Middle East and South Asia to 
East Asia.  The project involved the building up of an underground oil pipeline and the setting up of an oil stockpile depot system. This would require joint venture between oil consumers and producers such  as Japan, Korea, People's Republic of 
China, and India, so as to strengthen regional energy security. 
(d) Optimizing the capacity of the existing en ergy infrastructure and promoting oil 
transportation via existing pipelines, c onnecting the north–northeast oil pipeline 
transmission systems, and supporting the intra-regional connection of transport 
modes, whether by land, by rail or by waterway, linking up to the southern part of 
People's Republic of China so as to expand the energy market to neighboring 
countries. 
(e) Encouraging integration/merger among domestic producers in order to create 
economies of scale in the petrochemical business.  WT/TPR/M/123 
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VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
150. This fourth Trade Policy Review of Tha iland has undoubtedly contributed to a better 
understanding of recent developments in its trade an d trade-related policies.  Our discussion has been 
facilitated by the informative contribution of Ambas sador Puangrat Asavapisit  and her delegation as 
well as by the incisive comments of our discussant, Ambassador Seixas Corrêa. 
151. Members noted Thailand's prudent macroeconomic policies, trade liberalization and structural 
reforms, including those in the financial and co rporate sector, and encouraged the authorities to 
continue with this approach, which has contributed to the steady development of the economy since the previous Review in 1999.   
152. Members commended Thailand on its active partic ipation in the multilateral trading system, 
including its support for the Doha Development Ag enda.  Noting that Thailand has become more 
involved in bilateral/regional trade initiatives, so me Members enquired about the likely impact of 
these arrangements.  In this context, they asked  how Thailand intends to deal with the added 
complexity that the resulting rules will entail fo r its trade regime and the compatability of these 
arrangements with the multilateral trading system.   
153. Members encouraged Thailand to continue reforms, including improvements in customs 
procedures and liberalization of foreign ownership restrictions.  Members expressed concern about 
relatively high tariffs faced by their exports to Th ailand, particularly in agriculture; they called for 
greater transparency in the tariff regime, reduced ta riff rates and tariff escalation, and a narrower gap 
between bound and applied tariff rates.  Memb ers also encouraged Thailand to increase the 
transparency of its import licensing regime.  
154. While noting various new laws and regulations  on the protection of intellectual property 
rights, Members encouraged Thailand to continue  its efforts to combat the infringement of these 
rights.  Some Members sought clarification of deve lopments concerning Thaila nd’s regulatory regime 
for the telecommunications sector. 
155. Members also sought clarification on other i ssues, notably:  domestic regional imbalances;  
contingency measures; standards and SPS; govern ment procurement; local -content requirements; 
export duties and controls; investment incentives;  subsidies; privatization; competition policy; 
liberalization of trade in agriculture and fisheries products; and reform of the energy and various other 
services sectors. 
156. Members expressed their appreciation of the oral  and written responses to their questions as 
provided by the Thai delegation; they looked forward to receiving answers on any outstanding 
questions. 
157. This brings us to the conclusion of our four th Review of Thailand.  The large number of 
advance questions, the many interventions and the hi gh level of attendance indicate the important role 
that Thailand plays at the WTO.  In this context,  I would encourage Thailand to continue to strongly 
support, as it has up to now, the multilateral trading system. 
__________