Regionalism, Trade and Economic Development in the Asia-Pacific Region
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Regionalism, Trade and Economic Development in the Asia-Pacific Region

Edited by M. A.B. Siddique

This book is based on the premise that Regional Trade Agreements (RTAs) in the Asia-Pacific significantly impact on the material progress of the peoples of this region. These impacts – in terms of the benefits and costs associated with RTAs – will vary greatly from country to country. The internationally acclaimed contributors examine the theoretical perspective of RTAs in relation to exchange rates, the role and goals of the WTO and agriculture.
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Chapter 11: Comparative Advantage in Thailand and Indonesia and Potential Free Trade Agreements: Implications for Trade Diversion

William E. James


William E. James INTRODUCTION The recent trend for Thailand to enter into bilateral free trade agreements (FTAs) with major trade partners outside of the Association for South East Asian Nations (ASEAN) such as Australia is in marked contrast to Indonesia. The Thai Government is second only to Singapore among the ten South East Asian nations in the vigorous pursuit of free trade agreements on a bilateral basis with numerous trading partners.1 The proclivity to negotiate bilateral preferential trade agreements by Thailand is of possibly greater concern to ASEAN partners like Indonesia than is the case with Singapore. Thailand’s average MFN tariff for WTO members is 14.6 per cent and its average manufacturing tariff (also for WTO members) is 16.5 per cent (WTO 2003b). Thailand has bound 74 per cent of its 5505 tariff lines with the simple average bound rate of 28.4 per cent in 2003.2 Thailand also maintains tariff quotas on 23 agricultural products (WTO 2003a, pp. 38–9). In contrast, 99.9 per cent of Singapore’s tariff lines are duty-free, with only four tariff lines subject to specific duties (WTO 2000). Singapore has bound 70.5 per cent of its tariff lines with an average bound tariff rate of 9.7 per cent.3 The high levels of protection in Thailand compared with Singapore imply larger potential for trade diversion in the Thai case. Preferential agreements between Thailand and major markets for Indonesian exports like the US and Japan are also of concern because of the potential for such agreements to...

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