Japanese trade minister Shoichi Nakagawa arrived Sunday in Bangkok a bid to resolve the final deadlock of free-trade negotiations with Thailand, with both sides hoping to clinch a basic agreement later in the day.
Nakagawa is scheduled to meet with Thai Deputy Prime Minister Somkid Jatusripitak, concurrently finance minister, and his counterpart, Commerce Minister Thanong Bidaya, at a Bangkok hotel.
The liberalization of industrial goods is a major stumbling block, as Thai trade negotiators declined to remove tariffs on luxury cars and hot-rolled steel by 2010.
Thailand wants to keep high tariffs on Japanese luxury cars for another seven years and has offered to liberalize its steel market in 10 years, according to a Thai trade negotiator.
Pinit Korsieporn, deputy secretary general of Thailand's Office of Agriculture Economics, told that Japan has still declined to give Thailand similar concessions for tuna, raw sugar, canned pineapple, and other farm products as given to Mexico.
Japan has agreed to immediately abolish tariffs on okra, nuts and frozen fruits including papaya, mango, guava, durian, jackfruit and rambutan, according to Pinit.
Japan has also offered to give Thailand a quota for bananas and processed pork and beef, he added. But tuna continued to be excluded.
However, Thailand is not happy that Japan's planned slashing of tariffs on Thai farm products is being done to help Thai farmers hit by drought and last year's tsunami.
“It is not right for Japan to insist that the concessions for agricultural products are not part of the FTA negotiations, but merely an assistance to help Thailand coping with the tragic tsunami calamity,†Pinit said.
Another major barrier to Thai products would be the rules of origin set by Japan, according to Thai negotiators.
â€Some 500 agriculture and fishery products from Thailand will not be eligible under this free trade agreement with Japan since the present rules of origin set by Japan require 90 percent of local content and state that all seafood must be from trawlers that employ more than 75 percent Thai crews,†Pinit said.
Japan is the largest trading partner for Thailand, with some 20 percent growth annually.
Last year, Thai exports to Japan totaled only $13.49 billion while its imports from Japan came to $22.29 billion, recording a deficit of $8.79 billion, according to official statistics from Thailand's Customs Department.
In the first half of this year, trade between the two countries reached $20.56 billion, about 18 percent growth, and Thailand was still in a deficit of $5.68 deficit with Japan, according to the figures.
An FTA deal with Thailand would be the fifth for Japan, which already has FTAs with Singapore and Mexico and struck a basic deal with the Philippines in November and Malaysia in May.
The two countries launched the formal FTA talks in February 2004 and have since held eight rounds of talks.