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In order to maximise the benefits from closer economic interaction, bilateral CEPs go beyond the liberalisation of goods, services and investment. Cooperation in other areas of economic policy can help facilitate trade by improving the conditions for doing business in each other’s economy. A bilateral CEP is the perfect vehicle for developing mutually beneficial cooperation between countries which in turn can contribute to improved economic performance. This chapter looks at other trade- related issues that could be addressed in a CEP between Thailand and New Zealand.
Exporters often face red tape and bureaucratic difficulties when introducing their goods and services into a new market. Different countries have different regulations governing the technical requirements for products and it can be difficult and expensive for overseas providers to understand and comply with the foreign parameters.
With a view to minimising technical barriers affecting trade between Thailand and New Zealand, and specifically with the aim of reducing the transaction costs to business associated with different standards and regulatory approval, a CEP could contribute to the harmonisation of technical regulations through:
Not only will this allow both Thailand and New Zealand to expand their bilateral trade but it will also maximise the benefits of a CEP by minimising disguised technical barriers and by smoothing the progress of trade between the two countries.
Thailand and New Zealand have institutions that set standards for the effective conduct of business and trade and to minimise risks to health, safety and the environment.
Thailand has been a party to the Agreement on Technical Barriers to Trade (TBT Agreement) under the WTO since 1995. The Thai Industrial Standards Institute (TISI), under the Ministry of Industry, was designated as Thailand’s TBT enquiry point and notification authority. However, since October 2002 as part of restructuring the bureaucracy, Thailand has two designated TBT enquiry points/notification authorities: TISI for industrial products, and the National Bureau of Agricultural Commodity and Food Standards (ACFS) for agricultural and food products.
Government departments as well as relevant regulatory authorities responsible for the implementation or administration of technical regulations, standards and conformity assessment procedures have also been informed of their obligations under the Agreement. The National Committee on Technical Barriers to Trade, comprising representatives from relevant public and private organizations, was established to ensure that Thailand’s implementation and administration of technical regulations, standards and conformity assessment procedures are in compliance with the TBT Agreement.
Technical regulations, standards and conformity assessment procedures are published in the Thai Government Gazette before entering into force. In order to improve transparency, they are sometimes notified on the website [external link] and in other publications, such as local newspapers in the case of mandatory standards, or the TISI newsletters for standards developed by the Thai Industrial Standards Institute. During 1995-2003 Thailand submitted 219 TBT notifications to the WTO.
In New Zealand conformity assessment is primarily structured through institutions that accredit third-party assessment bodies. Its specialist technical standards and conformance institutions and the enabling legislation consist of:
The Ministry of Economic Development has responsibility for overseeing the standards and conformance infrastructure and for monitoring the effects of regulation, standards and conformance on industry. It strives to maintain the most appropriate and cost-efficient approach to standards and conformance, thereby reducing the effect of TBTs. New Zealand is a full member of the WTO and is a party to the Agreement on Technical Barriers to Trade. New Zealand's TBT enquiry point for all non-agricultural products is Standards New Zealand. The SPS enquiry point (for agricultural products) is the Ministry of Agriculture and Forestry. From 1995-2003 New Zealand submitted 45 TBT notifications to the WTO.
The WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) establishes the international rules-based framework for developing and adopting SPS measures. The SPS Agreement acknowledges the right of members to undertake measures to protect human, animal or plant life or health. It requires that such measures are not used to restrict trade unnecessarily, are based on scientific principles and are not maintained without sufficient scientific evidence. It recognizes the international standards, guidelines and recommendations of the International Office of Epizootics (OIE) for animal health; the International Plant Protection Convention (IPPC) for plants; and the Codex Alimentarius Commission for human health.
As a member of the WTO, Thailand recognises its rights and obligations under the Agreement on the Application of Sanitary and Phytosanitary Measures. However, as a part of the governmental restructuring, the National Bureau of Agricultural Commodity and Food Standards (ACFS), established under the Ministry of Agriculture and Cooperatives, has assumed responsibility as Thailand’s enquiry point/notification authority under the SPS Agreement since October 2002. The establishment of the ACFS aims to consolidate work related to formulation of agricultural commodity and food standards under various authorities within one entity.
The National Committee on Sanitary and Phytosanitary Measures, comprising representatives from relevant public and private agencies , was established to ensure that Thailand’s implementation and administration of agricultural commodity and food standards, quarantine procedures, control, import and export inspection, and certification systems, are in compliance with the SPS Agreement and to achieve an appropriate level of protection in domestic and international markets. As a member of and an active participant in various international organizations, including Codex, OIE, and the IPPC, Thailand has maintained SPS measures in compliance with those international standards.
Like New Zealand, the Thai Government places high priority on SPS standards and food safety. A serious attempt has been made to raise the standards and inspection system of Thai agricultural commodities in order to improve competitiveness and export opportunities for Thai agricultural products. Thailand’s aim is to promote Thailand as the "Kitchen of the World".
In New Zealand, the Ministry of Agriculture and Forestry is the primary government department responsible for implementing the SPS Agreement. New Zealand manages its SPS systems in accordance with its rights and obligations as a member of the World Trade Organization (WTO), Office International des Epizooties (OIE), Joint FAO/WHO Codex Alimentarius Commission (Codex) and party to the International Plant Protection Convention (IPPC), and the Plant Protection Agreement for Asia and Pacific Region.
New Zealand is a major participant internationally in SPS issues. Officials from both the Ministry of Foreign Affairs and Trade and the Ministry of Agriculture and Forestry regularly represent New Zealand's interests at the WTO SPS Committee in Geneva. Officials from the Ministry of Agriculture and Forestry, including the New Zealand Food Safety[1] Authority, also hold key positions in the relevant international standard-setting organisations recognised by the SPS Agreement (such as the OIE, Codex and IPPC), chairing international committees, serving on expert panels and providing high-level technical input.
[1] The New Zealand Food Safety Authority is mandated with protecting and promoting public health and safety and facilitates access to markets for New Zealand food and food-related products.
New Zealand's approach to the development of SPS standards is based on the use of risk analysis consistent with international standards and the WTO SPS Agreement issues. The Ministry of Agriculture and Forestry works with exporting countries to develop country and commodity specific import health standards that mitigate risks associated with imported products. In its Trade Policy Review (2003) of New Zealand, the WTO notes that it is especially difficult for some products (eggs and chicken meat being of interest to Thailand) to be imported since they do not meet the required standards.
A Closer Economic Partnership could reiterate the commitment of Thailand and New Zealand to the WTO SPS Agreement. On a bilateral level the CEP could encourage technical cooperation between the regulatory agencies of the two countries in order to enhance implementation of the rules-based framework of the SPS Agreement and to facilitate bilateral trade.
In 1999 Thailand enacted a set of new laws to prevent unfair trade practices. These new laws consist of the Trade Competition Act and the Act on the Price of Goods and Services. The objective of the Trade Competition Act is to create fair competition amongst private enterprises in Thailand, while the Act on the Price of Goods and Services aims to prevent the fixing of purchase and distribution prices and/or the setting of unfair conditions and trade practices. Both Acts will contribute to fairer business practices and create a more liberal trade and investment climate in Thailand. In addition to raising levels of productivity, efficiency, and international competitiveness, the acts will provide protection for the recently amended Constitution and current National Economic and Development Plan, which were designed to support a free market economic system. Both Acts also complement other liberal legislation such as the Foreign Business Act and the Civil and Commercial Codes.
New Zealand maintains robust competition laws, which proscribe any act that restricts or obstructs competition, with some limited exceptions. The main legislation governing competition in New Zealand is the Commerce Act 1986. It prohibits business arrangements (e.g. price fixing) and mergers and acquisitions that substantially lessen competition, as well as abuse of market power. Although there are a few examples of sector specific regulations, these are aimed at supplementing certain aspects of the generic competition law in these sectors. The Commerce Commission, an independent statutory body, is responsible for enforcing competition law and the Ministry of Economic Development is responsible for advising the Government on competition policy matters.
A competition chapter in the CEP between Thailand and New Zealand could promote competition in markets and help curtail anti-competitive behaviour. Such an undertaking would reinforce both countries’ commitment to the APEC Principles to Enhance Competition and Regulatory Reform. Co-operation between the two countries under the CEP could include exchange of information, notification and consultation on the development of competition policy and competition law enforcement.
Thailand and New Zealand are Parties to the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) and maintain comprehensive legal frameworks for the protection of intellectual property rights.
In following the TRIPS principles the Government of Thailand has issued a number of laws in recent years such as the Copyright Act, the Patent Act, the Trademark Act and the Trade Secrets Act in order to eliminate infringement of intellectual property rights (IPRs). Thailand aims to create awareness amongst the Thai public and to provide sufficient information on technology and intellectual property rights to promote research and development in the intellectual property field.
New Zealand legislation involves a series of Acts including patents, trade marks, copyright and design and plant variety rights, with enforcement carried out at the border and through primarily civil action in the courts.
In support of economic growth, the enforcement of intellectual property rights is important for fostering innovation and product development. Cooperation in a CEP might include exchanging information and material on programmes pertaining to education in and awareness of intellectual property rights, as well as encouraging and facilitating the development of contacts and cooperation between the countries’ respective government agencies. An appropriate balance between the interests of right holders and users of intellectual property should also be maintained.
Cooperation between Customs agencies is an important means of facilitating international trade. In today’s increasingly challenging trading environment, it also provides an avenue to secure the flow of goods against terrorist-related activity in a way that can meet the expectations of our international trading partners.
There is scope in the context of a Thailand/New Zealand CEP to implement the APEC Principles for Customs Cooperation to facilitate and protect trade, and provide economical, modern border protection. While the New Zealand Customs Service maintains a liaison post in Bangkok, a CEP provides options to enhance mutual assistance between the New Zealand and Royal Thai Customs including, inter alia, information exchange on a range of enforcement matters, technical assistance, promotion of paperless trading, risk management and verification of origin. The CEP could provide the framework for the respective Customs administrations to agree on an Arrangement that will implement these and similar initiatives.
The increasing use of electronic communications by business is improving the efficiency and reducing the cost of transactions. Access to digital technology and the development of digital networks are bringing markets closer together, facilitating existing trade and introducing new services. Small and medium sized enterprises in particular profit from the use of e-commerce as it lowers the cost of entering new markets and reaching a wider range of international suppliers and customers.
Over the years the Thai government has focused its attention to the development of electronic commerce by developing the national electronic commerce framework and issuing laws facilitating the use of electronic commerce by Thai people. Such laws include Electronic Transactions Bill (entering into force in April 2002) and another four, i.e. the Electronic Fund Transfer Law, the Data Protection Law, the Computer Crime Law, and the National Information Infrastructure Law being under consideration for passage.
Electronic commerce is increasingly influential in Thai society. Thai internet penetration is rapidly growing. The record shows that domestic internet traffic volume reached a high level of 6351.4 GB per day in 2003. Meanwhile, total internet users have grown year-on-year basis reaching 6 million in 2003. This growth will continue due to the support of the Thai government through new laws and initiatives.
In 2000, the New Zealand Government launched its e-commerce strategy. It detailed the Government's commitment to provide leadership and to work in partnership with business and the broader community to build the e-commerce capability of New Zealanders. The Strategy recognised the opportunities and risks associated with the e-commerce and information technology revolution and set out the goals and principles to guide the Government's response. The Strategy identified three broad roles for government:
To date, the Government has implemented a significant number of initiatives in all these areas including:
Currently, 75% of New Zealanders regularly access the internet, from home, work or public access points. In addition, business use is high, with 95% of large firms and 75% of small firms using the internet.
Cooperation between Thailand and New Zealand on e-commerce could encourage the coordination of legislation and regulations, facilitating trade in digital products and ensuring that the development of electronic commerce is not impeded by unnecessary or burdensome national regulations. Work on e-commerce is also being undertaken in multilateral fora such as APEC, the UN and the WTO.
Government expenditure is an important component of total economic activity in both Thailand and New Zealand. Both countries participate in the WTO Working Group on Transparency in Government Procurement but neither is a member of the Government Procurement Agreement. Thailand requires its public agencies to apply specific local preference policies to promote local businesses.
Thailand has committed to improve the government procurement regime to be in consistency with the APEC Non-binding Principles on Government Procurement, namely transparency, value for money, open and effective competition, fair dealing, accountability and due process, and non-discrimination. In 2002, Thailand launched the Public Sector Reform Act that changed the structures and functions of agencies in the public sector. The public procurement management function is one of the major reforms. Previously responsibility for procurement was spread among different central agencies, but is now solely the responsibility of the Comptroller General’s Department, Ministry of Finance.
The Department of Comptroller General intends to develop the Public Procurement Reform Plan to be a framework which will promote good governance in the public sector in the near future. The master plan will address electronic procurement development, procurement professional development, and SME participation in supply and international agreements. Moreover, the reform plan will emphasise the need for development of all procurement issues to be in line with international practices.
New Zealand’s government procurement policy is to provide an open and transparent market based on the principles of best value for money; open and effective competition; full and fair opportunity for domestic suppliers and improving business capabilities. The global non-discriminatory approach is reinforced by bilateral commitments with New Zealand’s CEP partners Australia and Singapore. For a description of New Zealand’s government procurement policy regime see “Government Procurement in New Zealand: Policy Guide for Purchasers [external link]” (July 2002).
A bilateral CEP could help facilitate access by New Zealand and Thai goods and services providers to the government procurement markets in both countries, through cooperation to address any restrictions. A framework consistent with the APEC Non-binding Principles on Government Procurement could be developed to improve transparency of market opportunities and information exchange. It is also an objective of Thailand to develop its Government Procurement regime in line with international best practices.
While the main purpose of the CEP is to facilitate trade there [may be ] times when measures [might] be taken to counter [unfair] trading practices such as product dumping. The WTO has rules relating to anti-dumping, countervailing duties and safeguards. Handling of trade remedies in the context of a CEP could be discussed in relation to the objectives of maintaining adequate protection from unfair trading practices while ensuring that the benefits of trade liberalisation are not undermined.
Thailand and New Zealand are committed to the early elimination of all forms of export subsidies on all agricultural products in the current Doha Round of WTO negotiations. This position recognises the trade-distorting nature of export subsidies and their harmful effect on agricultural trade and development. The CEP could address the elimination of export subsides on bilateral trade and reinforce the parties’ multilateral commitments in this area.
Sustainable development is a core national objective for both Thailand and New Zealand. The linkages between social, economic, environmental, and cultural aspects of sustainable development require an integrated approach to policy development and implementation.
Thailand and New Zealand both acknowledge the importance of core labour standards and the principles underlying them, as contained in the International Labour Organisation’s (ILO) Declaration on the Fundamental Principles and Rights at Work. Both countries are committed to ensuring domestic compliance with these fundamental principles.
Since the early 1990s, Thailand has introduced a number of laws and regulations relating to environmental conservation and pollution prevention. The landmark Enhancement and Conservation of the National Environmental Quality Act of 1992 provides a comprehensive framework for subsequent environmental conservation and pollution prevention measures that are still in force today.
The New Zealand Government has produced a sustainable development Programme of Action to ensure the well being of current and future generations. In line with this approach, the New Zealand Government has developed frameworks to integrate labour and environment considerations more effectively in trade agreements. These frameworks can be viewed on the Ministry of Foreign Affairs and Trade website .
The Ministry for the Environment [external link] and the Department of Labour [external link] are responsible for policy advice and implementation relating to environmental and labour issues.
Thailand and New Zealand have worked together both bilaterally and multilaterally on sustainable development including the promotion of labour and environmental standards. New Zealand has hosted delegations of Thai labour officials, providing opportunities to exchange information on labour systems. In the multilateral arena Thailand and New Zealand work together in many organisations including the International Labour Organisation and the Environmental and Sustainable Development Division of the United Nations Economic and Social Commission for Asia and the Pacific, which is based in Bangkok. Both Thailand and New Zealand participated in the World Summit on Sustainable Development and were party to resolutions which it adopted including the Johannesburg Plan of Implementation.
Closer Economic Partnerships provide an opportunity to demonstrate a country’s commitment to developing and applying sound sustainable development policy, which will in turn create a stable and attractive climate for foreign investment. Labour and environment provisions can be utilized to formalise and enhance existing relationships and explore areas for future cooperation and dialogue both together and in concert with other countries in multilateral fora.
These provisions would recognise the diversity of social, environmental, legal, cultural and economic circumstances in individual countries and should not deny legitimate comparative advantage arising from different circumstances. The form and content of any labour or environment component would reflect the mutual interests of Thailand and New Zealand and objectives both countries want to promote.
Possible areas for Thailand and New Zealand to explore include: the role of relevant international organisations and instruments (e.g. the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work and Multilateral Environment Agreements); implementation of domestic laws; mechanisms for cooperation and dialogue; and scope for cooperation in capacity building.
The Treaty of Waitangi (signed in 1840) is the founding document of New Zealand's partnership in governance between the Crown and Maori (New Zealand's indigenous people). Due to the importance of the Treaty of Waitangi, New Zealand has included exceptions both in its GATS commitments and in its CEP with Singapore related to Maori. The relevant clause in the New Zealand/Singapore CEP allows the New Zealand government to implement policies related to Maori without being constrained by CEP commitments provided these policies are not used as a means of arbitrary or unjustified discrimination against persons of the other Party or as a disguised restriction on trade in goods and services or investments. New Zealand would seek to include a similar provision in a CEP with Thailand.
Taxation regimes are an important element in influencing international business transactions. Addressing this matter Thailand and New Zealand signed a bilateral agreement on the avoidance of double tax (DTA) in 1998. Comments and ideas relating to taxation that may arise in the context of a CEP could be fed through to any future review of the DTA.
