Thais explore trade prospects

Getting ahead of the eventual implementation of the Asean Free Trade Area (AFTA) agreement, Thai businessmen are now starting to penetrate the Philippine market to strengthen their products’ presence in the country.

Industry leaders, mostly from the textile and garment manufacturing in Thailand, was in Cebu recently for a three-day trade exploration mission, led by the office of the Commercial Affairs from the Royal Thai Embassy, Minister Counsellor Suree Jirattikankul.

In a press briefing, Kumjorn Chuenchoochit, director for Thai Textile Manufacturing Association, said that with the onset of AFTA, there is a lot of opportunities to take advantage of in the ASEAN member countries.

The textile and garment manufacturing, which is one of the biggest industries in Thailand, is now starting to make strong presence in these countries, including the Philippines.

Chuenchoochit said Thailand’s textile and garment industry has seen a great potential to tap the close to 90 million consumer base in the Philippines, as this move could boost Thailand’s export volume to the country.

The group met with several importers and retail operators in Cebu, including shopping malls to forge partnership ventures, and other trade exchanges.

He said one of the interests of the group is also to find out the cost of doing business in Cebu, for a possibility of setting up textile and garment manufacturing plants here.

“We have very little knowledge about Cebu,” he said.

The group still has to examine if Cebu will be a competitive site for manufacturing plants, as cost of power and labor are still perceived to be higher than other investment destinations in Asia.

“While cost of production is rather high here, there is good potential for export to the Philippines,” said Chuenchoochit.

At present, Thailand is heavily export textile and garment goods to the United States and Europe. With its active stance to penetrate the Philippines, through series of trade mission, Chuenchoochit said there is a good possibility that Thailand could improve its import volumes to the Philippines, in the next few years.

He said as early as now, Thailand has to maximize the AFTA objective.

The objective of AFTA is to increase the ASEAN region’s competitive advantage as a production base geared for the world market. A vital step in this direction is the liberalization of trade through the elimination of tariffs and non-tariff barriers among the ASEAN members.

This activity has begun to serve as a catalyst for greater efficiency in production and long-term competitiveness. Moreover, the expansion of intra-regional trade is giving the ASEAN consumers wider choice and better quality consumer products.

Member Countries are working towards the total elimination of import duties on all products to achieve the ultimate objective of a free trade area. The AFTA Council has agreed that the target dates to achieve this objective will be in 2015 for the six original ASEAN Member Countries and 2018 for the newer members.

This move is expected to create an integrated market where there is free flow of goods within the region. Total elimination of import duties shall achieve a maximum impact in enhancing the ASEAN region’s economic competitiveness vis-à-vis the rest of the world.

The ASEAN consists of the Philippines, Brunei, Indonesia, Laos, Singapore, Malaysia, Vietnam, Cambodia, Thailand, and Myanmar, and with the addition of three countries—Japan, China and Korea.