5 - Thailand–Australia Free Trade Agreement

Summary

THE AUSTRALIAN PERSPECTIVE

It falls to me to present perhaps the driest presentation of this conference, but also perhaps the most significant development in recent history of Thai- Australia relations.

Let me offer some context and a personal view. I think there is some risk of the Association of Southeast Asian Nations (ASEAN) going off in different directions in terms of growth strategies and, possibly, related outlooks and interests. Southeast Asia could become, at least, a two-track region. With the addition of Vietnam, Cambodia, Laos and Burma, ASEAN became an organization which includes fast-developing, newly-industrializing countries (Singapore, Malaysia and Thailand) and four developing countries.

The fast developers are aggressively open to international trade, embracing globalization, liberalizing and progressively operating to international standards including those of governance. As a general proposition, that is overall not true of the developing four. In between these two broad groups, some others are potentially making the wrong choices, becoming increasingly economically nationalist, anti-globalization, protectionist, and, in some cases, anti-American. Their systems of governance await determined processes of reform despite the shock delivered by the Asian financial crisis of 1997–98. And in an unforgiving globalized world they reap the consequences: Foreign direct investment (FDI) avoids them, and their approach affects perceptions of the whole region. In turn, this retards growth: Domestic consumption-led growth in a number of ASEAN countries is simply insufficient to match population and labour force growth. So even at, say, four per cent Gross Domestic Product (GDP) growth, these countries are sliding backwards and are vulnerable.

Thailand is not one of these. It has opted for pro-growth, pro-business policies. It has embraced the discipline of the market and decided to seek development through accepting globalization rather than opposing it. It is sometimes an imperfect process, but it is delivering results — results which are delivering impressive levels of growth and improved standards of living beyond the Bangkok commercial elite.