Keynote Address by Mr. Narong Sasitorn,
Deputy Permanent Secretary, Ministry of Foreign Affairs
At the Annual General Meeting
of the European–ASEAN Business Centre
Sukhothai Hotel, Bangkok,9 April 2014
*********** Executive Director of the European–ASEAN Business Centre,
Representatives of European Chambers of Commerce in Thailand,
On behalf of the Ministry of Foreign Affairs, it is my honor and pleasure to be here today. I would like to thank the European–ASEAN Business Centre (EABC) for inviting the Ministry to take part in this important event. If not for a very important meeting which he has to chair, Mr. Sihasak Phuangketkeow, Permanent Secretary would not miss this opportunity to meet with you this evening. He asked me to convey his very best wishes for a fruitful annual meeting of the EABC.
Allow me to begin by expressing my appreciation for the work of the EABC. Since your founding in 2011, the EABC has already played a key role in strengthening economic and business relations both between Europe and Thailand and Europe and ASEAN. The EABC’s Business Position Paper provides a great agenda for a constructive dialogue between the European business community and the Thai agencies. I also had a look at the EABC’s website. It is well-organized and contains a lot of useful information.
With all your excellent work, I have no doubt that what you are doing is having a wider effect of enhancing the overall relation between Europe and Thailand, a relation which we highly value and appreciate.
New Era of Thai – European relations
The Thai-European relations are longstanding and are based on a firm foundation of common values and shared interests.In the last two years, we have experienced a historical apex in our overall relations. We have seen an unprecedented level and frequency of exchanges in high-level visits. Heads of European governments and the President of the European Commission visited Thailand, while the Thai Prime Minister visited many European countries, including the UK, France, Germany, Sweden, Belgium, Poland, Italy and Switzerland, as well as the city of Brussels. These visits were complemented by numerous visits at the ministerial level, including the visit of Mr. Antonio Tajani, Vice President of the European Commission and Commissioner for Industry and Entrepreneurship last November, during which he met with the EABC and the European business community in Thailand.
Much progress has also been made with regard to crucial legal instruments. The Partnership and Cooperation Agreement or PCA between Thailand and the EU, which is a basis for our future cooperation, was initialed last November in Brussels and both sides are undergoing internal processes with a view to signing the instruments in a timely manner. The Thai–EU Free Trade Agreement (Thai – EU FTA) negotiations were launched in March last year. Important progress has already been achieved in the past three rounds of negotiations. As we speak, an intersessional meeting is ongoing in Brussels.
We look at these two instruments not only as instruments for trade and investment. For us, they are instruments of commitment in our long term partnership. I am pleased that many of the European investors have found Thailand to be a place to do profitable businesses, and some have made Thailand their home. Many have even invited their fellow countrymen to join them here. As such, Thai and European businesses are inseparable partners for growth, sharing common interests and goals.
Key economic data confirms this. Our trade volume doubled during the past ten years. With trade totaling almost 57 billion USD, the European Economic Area or EEA (EU + EFTA) remains Thailand’s fourth largest trading partner. Last year, Thai exports to the EU alone overtook that to Japan for the first time. Last year, Thai Direct Investment in the EEA increased to a record high of 1.9 billion USD, surpassing the FDI from the EEA in Thailand for the first time in history .
Many Thai investors are now expanding their businesses to Europe, especially in the food and agro-industries, tourism and gastronomy and the retail sectors. Examples include Thai Union Frozen food’s canned tuna factories in France, department stores run by the Central Group in Denmark and Italy, plastic manufacturing in Lithuania and Ireland, CPF with its production base in many European countries, Sor Khonkaen’s sausage factory in Poland, and the Sahaviriya Steel Industry plant and the Landmark Hotel in the UK, to name but a few. Government agencies are also doing their part to promote Thai direct investment in Europe as a key policy to strengthen Thailand’s position in the global economy.We are optimistic that this positive trend will continue in order to match the real potential of the Thai-European relations.
Expanding Economic Partnership
Despite the strong fundamentals, there will no doubt be times when either one of us, Europe or Thailand, faces certain challenges. Thailand sees Europe’s steady recovery from past economic challenges as an opportunity to further enhance our ties. Examples of Thai investments in Europe which I mentioned earlier are testaments to the confidence that Thai investors have in the European economy.
With regard to Thailand’s current political situation, I wish to share with you some of my thoughts.
First, I have great confidence in the resilience of the Thai people. We have faced with many hard times in the past and have always bounced back. Therefore, I believe that the Thai people will come out of this political crisis stronger than before, with an even firmer commitment to the path of democracy. Actually, looking back in history, Thailand has never deviated from the democratic path, which is one of the core values of the Thai society. We highly appreciate the gesture of support and understanding from our European partners during this difficult time.
Second, while this is indeed a most challenging time for Thailand, I urge you to look at Thailand in the longer term. With our strong fundamentals, Thailand remains a viable destination for trade and investment from Europe.Thailand’s macroeconomic and fiscal positions remain strong. Export industries have not been affected by the political turmoil. There are, however, signs of sluggish domestic consumption, but we expect it to recover very swiftly once the political tensions subside. Our tourism industry is quickly regaining its strength to that of the pre-turmoil period.
I would like to take this opportunity to reassure you that we are committed to minimizing any negative effect from this political crisis on our investment-friendly policies. As you are aware, last week, the Election Commission allowed the Government to appoint the new Board of Investment. This will enable the processing of applications for new investment projects worth more than 600 billion THB.
Thailand–Europe: a natural bilateral and regional partner
Looking into the future, Thailand and Europe can become each other’s key partner in our respective regions by building on our interdependence and complementarities. This is supported by at least three factors:
First is Thailand’s geographical location. We are located right at the heart of mainland Southeast Asia. This sub region is fast emerging as a new growth center in the ASEAN region. With connectivity infrastructures linking Thailand with her neighbors, Thailand can become a bridge linking European businesses to those based in ASEAN and beyond.
Second, Thailand is an ideal partner for Europe in this region, not only because we share the same values, but also because Thailand is a modern country with a moderate foreign policy that values Europe’s constructive, intensive and lasting engagement in the region.
Third, Thailand is determined to overcome the middle income trap. We must increase our competitiveness. This can be achieved through the development of a higher skilled labor force as well as more business-oriented R & D for higher standards and good governance. We have also done much in terms of developing our physical infrastructure and are firmly committed to do more. We have set a target of reducing logistics cost from 15% of GDP to 13% by the year 2016. We are on course to reach that target.
We want to improve our business environment. We want to see Thailand move up to a higher ranking on ease of doing business and transparency indexes. In addition, we want to see our service industry having a greater say in the Thai economy.For this, we need Europe. And we believe that Europe would very much benefit from Thailand’s strategic location and our determination to improve the business environment.
Private Sector is Key to this Endeavor
In moving forward with our common goal of enhancing the Thai-European relations, the private sector will need to take a more central role. There are priority areas of future interaction and collaboration between our Governments and private sectors, be they education and R & D or standards, such as labor and environmental standards, good governance and Corporate Social Responsibility. Thailand can learn from European best practices in these areas, which will help us to adopt higher standards that would certainly benefit European businesses in Thailand. Ladies and Gentlemen,
I wish to conclude by thanking you for the confidence the European business community has shown to Thailand throughout the years, both in times of prosperity and in times of troubles. We look at our partnership with Europe not only as partnership for trade and investment, but also one that is based on mutual trust and shared values. We are a friend that you can count on. And I believe you would agree that for our partnership to further prosper, it is in our mutual interest to see Thailand progress along the path of democracy and market economy, to which we are firmly committed. Thank you very much.
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