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The services sector is becoming increasingly important in the international market place and contributes significantly to countries' foreign exchange earnings. The export of services can take many forms, from the provision of a service to overseas consumers in the provider’s home country through to service suppliers establishing a commercial presence or being employed overseas.
In Thailand foreign investment in services trade is subject to the Foreign Business Act. Further details are provided in Chapter Eight and Annex I. A qualified foreigner is permitted to work as a manager, executive, or specialist in a foreign company except in 39 professions described in the Royal Decree Prescribing Works Relating to Occupations and Professions in which an Alien is prohibited to engage, B.E. 2522 (1979). These include architecture, brokerage, civil engineering, legal services and tour guiding. Further details can be obtained from the Department of Employment [external link to DoE website] .
By international standards, New Zealand’s services sector is considered to be open with few barriers to foreign services suppliers. Indeed, where immigration and qualification requirements have been met, national treatment is generally extended to foreign suppliers of professional services.
Foreign investment in the provision of services is subject to the Overseas Investment Commission (see Chapter Eight for details) while financial institutions with a commercial presence in New Zealand remain subject to the provisions of the Financial Reporting Act 1993 and the Companies Act 1993.
Immigration legislation and policy is administered by the New Zealand Immigration Service [external link to NZIS website], which is part of the Department of Labour. The key legislation is the Immigration Act 1987, along with the Immigration Regulations 1999. Government Residence Policy and Government Immigration Policy are set out in the NZIS Operational Manual.
Services trade between Thailand and New Zealand is governed by the WTO General Agreement on Trade in Services (GATS). While trade in services is relatively modest in the overall bilateral economic relationship between Thailand and New Zealand, an increasing number of Thai and New Zealand companies are establishing cross border operations.
The broad aim of the CEP agreement would be to facilitate the trade in services between Thailand and New Zealand. Barriers that restrict services trade between both countries will need to be examined and the scope for improving market access, predictability and transparency explored. Means of protecting the government’s right to regulate as well as the provision, regulation and funding of public services will be important components of the agreement.
There is scope for progressing the mutual recognition of qualifications under a bilateral CEP. Mutual recognition would assist service suppliers in both countries and would encourage increased education and institutional linkages. Both countries continue to support mutual recognition initiatives in the WTO and in APEC particularly in the area of professional qualifications such as engineering.
A CEP could explore means for facilitating the movement of persons engaged in legitimate business activities between the two countries.
Given the nature of the two economies and the specific clusters of expertise in which Thailand and New Zealand have become specialised, there is scope in the CEP to explore opportunities for increasing opportunities for services trade. Public consultations in both Thailand and New Zealand will need to be conducted in order to identify specific areas of interest.
This section looks at some key services sectors in more detail.
Education linkages between Thailand and New Zealand have grown considerably over the past five years. Since 1998 student enrolments (both secondary and tertiary) have doubled, placing Thailand as New Zealand’s fourth largest source of students from Asia. Figure 7.1 displays the breakdown of enrolments in 2001 and 2002. In 2002, around three and a half thousand Thai students attended New Zealand education institutions, contributing an estimated US$34 million to the economy. The majority (60%) of these students were enrolled in English language courses.
Figure 7.1: Thai Students in New Zealand
Source: Ministry of Education
While SARS and other global uncertainties hindered growth in the global tourism sector during 2003, Thailand -New Zealand links remained tight. Last year nearly 19,000 Thais visited New Zealand as tourists. In turn, 60,000 New Zealanders travelled north to Thailand.
Figure 7.2: Thai Visitors to New Zealand (1991 – 2003)
Source: Tourism New Zealand
Figure 7.2 displays Thai visitor flows to New Zealand since 1991. Throughout the early to mid 1990s the number of Thai visitors grew strongly, peaking at 31,000 in 1996. The impact of the Asian Financial Crisis on tourism flows was severe, with Thai visitor numbers halving between 1997 and 1998. While a partial recovery was witnessed over 1999 and 2000, the impact of SARS during 2003 has again temporarily seen a fall in Thai visitors to New Zealand. It is hoped that the profile-raising effect of a CEP would help to increase these numbers.
Figure 7.3 shows the growth in trade in other services (i.e. excluding education and tourism) between Thailand and New Zealand 1998 to 2002. In 2002, Thailand imported services from New Zealand valued at US$6.9 million with an average annual growth rate of 22.8 percent while Thailand exported services to New Zealand valued at US$1.1 million with an average annual growth rate of 4.1 percent.
Figure 7.3: Services Trade Relationship between Thailand and New Zealand
Source: Bank of Thailand
In support of the wider economic and trade relationship, service suppliers in the fields of professional services, consultancy services, construction services, health services, and other business services, play an increasingly important role. Greater bilateral economic activity resulting from a CEP would help foster the services relationship between Thailand and New Zealand by providing additional opportunities for service suppliers in both countries. Increased trade in services also assists with the exchange and transfer of skills and knowledge as the ideas and experience of Thai and New Zealand service suppliers can be combined in order to offer more competitive service products on the world stage.
