"We have just concluded the sixth round of FTA negotiations with Thailand. We
came here with the objective of making significant progress so we could be in
the position of concluding this agreement by the spring. We have made progress
in many chapters, but still have much work ahead. The negotiating groups have
developed specific work plans and a path forward for resolving most of the
outstanding issues. We will exchange new proposals in the next several weeks so
we can continue to make progress.
When I return to Washington, I will discuss next steps with U.S. Trade
Representative Portman. We have a significant amount of work remaining to
conclude this agreement within the timeframe we have set. While the United
States believes that this goal is achievable, it will require both sides to
redouble their efforts and to consider creative solutions to the remaining
We continue to believe that concluding this FTA is important for both the
United States and Thailand and that it will bring a wide range of benefits to
both sides. The United States and Thailand already have a strong trade and
investment relationship, with almost $28 billion in trade last year. U.S.
foreign direct investment in Thailand totaled $7.7 billion. Once completed, the
FTA will further strengthen this relationship, bringing additional benefits to
both the United States and Thailand.
Let me outline some of those benefits.
First, the FTA will eliminate tariffs on trade between the United States and
Thailand. The United States already buys more Thai products than any country in
the world and the FTA’s new market access will only increase trade in the
future. Once the FTA is in place, no other country will have better access to
the U.S. market. So the FTA will not only help maintain our important trade
relationship, but further boost it. Without such an FTA, Thailand’s exporters
will lose the competitive advantage they would gain against some of their
fiercest competitors in the region.
But tariffs are only one element of what makes companies and countries
competitive. A second benefit of the FTA is that it will liberalize the Thai
services sector, including telecommunications, financial services, distribution,
and other sectors, and strengthen the protection of intellectual property. This
will further improve the investment climate, encouraging trade in services and
foreign investment. The Thai economy has grown significantly in the past few
decades, and along with it has come increase in income, life expectancy, and
welfare. One of the key factors in this story has been the success of Thai
businessmen in selling their goods to the global market. But companies around
the world are becoming increasingly competitive every day. The FTA will help
boost the global competitiveness of Thai companies and make Thailand a more
attractive place to do business.
As the Thai Government has made clear, there are difficult steps on the road
to the FTA that must be considered carefully. But they also are steps that must
be undertaken with urgency. Otherwise, Thai companies will lose out to larger
competitors in the region who can compete not only on price because in part of
their lower cost of capital, but also can provide products to customers more
quickly and efficiently because of their access to state-of-the-art
telecommunications, distribution, and other services. The FTA will encourage
relationships between U.S. services suppliers and Thai businesses and help
Thailand in its quest to remain on the cutting edge.
A third benefit of the FTA, and perhaps the most important, is job creation.
Studies show that increased trade generated by the FTA in manufactured and
agricultural products alone will result in the creation of tens of thousands of
new jobs in Thailand, and along with it higher living standards. We anticipate
increased exports for Thai producers in a wide range of products, from consumer
products and textiles and apparel to electrical machinery and medical
The FTA will not only increase jobs in industries producing goods that
traditionally have been traded between our countries, but also in businesses
offering high-technology, knowledge-based goods and services as well. Let me
give an example. Thailand has stated its intention to become a regional life
sciences hub. Thailand has seen an expansion in the amount of clinical research
done here. The FTA could help further develop this sector, creating hundreds of
jobs in an important area in which Thailand has some real comparative
We have seen this result in Jordan, another U.S. trading partner with which
we have had an FTA in place for several years. Its clinical research sector has
expanded rapidly after conclusion of our FTA. At the same time, Jordanian firms
have become the biggest pharmaceutical exporters in their region and their
domestic pharmaceutical industry is growing. This and other liberalization
resulting from the FTA has generated tens of thousands of new jobs in
A fourth benefit of the FTA is trade capacity building. We have focused
significant attention during the course of this negotiation on ensuring that
Thailand has the capacity to take full advantage of the benefits promised by
this FTA. We have established 50 projects based on the Thai Government’s
priorities. For instance, we are working on projects to foster SME development
and potential partnerships with U.S high-tech firms.
Before concluding, I wanted to touch on one other issue, that is the
pharmaceutical issues under discussion here this week. We have presented a
proposed text and have begun discussions of this issue. While we welcome the
views of all Thais on this and all FTA issues, the claims by some groups that
the FTA will cause drug prices to rise by whole multiples of their current price
is based on a lack of understanding of the U.S. proposal, runs counter to the
experiences of our other FTA partners, and amounts to scaremongering. This is a
serious issue affecting the welfare of Thai HIV/AIDS and other patients and
deserves serious discussion.
HIV/AIDS sufferers today have hope for the future because of the massive
resources devoted to the development of effective medicines. The challenge in
the future will be to ensure that those in need have access to a new generation
of drugs that combat HIV/AIDS and other health problems that may emerge.
Clearly, having access to newest medicines is critical. But without any
incentives to develop these medicines, there will be fewer new drugs to access.
We believe we have struck a careful balance between these twin priorities.
So, summing up the week, we have seen some important progress in some areas,
but we still face many challenges to concluding this agreement in the time
available. We are determined to do everything in our power to achieve this