The Honorable Ted Stevens
President Pro Tempore
United States Senate
Washington, D.C. 20510
Dear Senator
Stevens:
In accordance with section 2104(a)(1) of the Trade Act of 2002
(the Trade Act), and pursuant to authority delegated to me by the
President, I am pleased to notify
the Congress that the President
intends to initiate negotiations for a free trade agreement (FTA)
with
Thailand. We expect these negotiations to get underway by June 2004, and we will
be
consulting closely with the Congress regarding these negotiations,
as required by the Trade Act.
The Administration is committed to bringing back trade agreements
that open markets to benefit our farmers, workers, businesses, and
families. With the continued
help of Congress, we can move promptly to
advance America’s trade interests.
An FTA with Thailand will help foster economic growth and create
higher paying jobs in the United States by reducing and eliminating
barriers to trade and
investment between Thailand and the United
States. It would increase benefits to consumers through
increased
competition in both countries. The FTA will also enable us to address market
access
impediments in Thailand, including high tariffs on agricultural
goods, unjustified use of
sanitary and phytosanitary measures,
restrictive licensing practices, inadequate protection
of intellectual
property rights, an unpredictable and nontransparent customs regime, and certain
limitations on access for U.S service providers.
We believe the United States has much to gain in pursuing a
negotiation with Thailand. Thailand already is our 18th largest trading
partner with $19.7
billion in total trade during 2002. The increased
access to Thailand’s market that an FTA would
provide would further
boost trade in a wide range of both goods and services, enhancing employment
opportunities in both countries. Negotiation of an FTA would level the
playing field for
U.S. exports from two perspectives. Many of
Thailand’s products already enter the U.S.
market duty free under the
Generalized System of Preferences. An FTA would make duty-free
treatment reciprocal. In addition, an FTA would give U.S. exports the
comparable
preferential treatment to that which Thailand affords goods
from its ASEAN and other preferential
trading partners.
An FTA with Thailand would be particularly beneficial for U.S.
agricultural producers who have urged us forward. The United States is
one of the largest
suppliers of agricultural products to the Thai
market, which was the 16th largest market for U.S. farm exports
in
2002. Elimination of Thailand’s high duties and other barriers in the
agricultural
sector would create new opportunities for U.S. farmers in
this major market. For this
reason, agricultural groups have
consistently cited Thailand as one of the potential FTA partners
of
most interest to them.
We also will seek improved market access through eliminating high
tariffs and non-tariff barriers on industrial goods of export interest
to the United States. We
are sensitive to Congressional concerns on
automotive issues and will consult closely with
Congress and U.S. auto
manufacturers and workers in developing our positions on this
issue. We
also will seek to eliminate certain restrictions that make it difficult for U.S.
service providers to operate in the Thai market, and to address other
barriers to U.S. goods and
services.
We recognize the concerns that have been raised by U.S. industry
about the deficiencies in Thailand’s protection of intellectual
property and in its customs
regime. We have held detaile and extensive
discussions on these issues with Thailand throughout
the 16 months
under our bilateral Trade and Investment Framework Agreement (TIFA) and have
made progress on specific issues, including the efficiency and
predictability of
the Thai customs process and the increased
coordination of the Thai agencies responsible for
intellectual property
enforcement. Addressing these issues, as well as other areas such as
strengthening measures against the production of illegal optical discs,
will be essential for the
successful conclusion of these negotiations.
In this regard, we will seek to include provisions
that bring
Thailand’s intellectual property and customs regimes up to the standards set in
our other
recent FTAs, as indicated below in our specific negotiating
objectives.
An FTA also would encourage greater liberalization of foreign
investment between the United States and Thailand. The United States
already is the second
largest investor in Thailand. An FTA would build
upon the preferential access afforded U.S.
companies under the
U.S.-Thailand Treaty of Amity and Economic Relations, one of U.S. industry’s
highest priorities.
We believe an FTA would help strengthen our cooperation with
Thailand in multilateral and regional fora. We shared the concerns
expressed by some Members of
Congress regarding Thailand’s commitment
to the multilateral trade agenda following
the WTO Ministerial meeting
in Cancun. Since then, the Thai government has reiterated its
strong
commitment to achieving multilateral liberalization of agricultural trade and to
concluding the Doha Development Agenda.Thailand also has stated its
intention to continuing to actively
cooperate with the United States in
all international trade fora. Thailand also did an excellent job
hosting last October’s successful APEC meetings, at which all 21 APEC
members called for the
resumption of the Doha negotiation based on the
text developed at Cancun.
An FTA with Thailand also would advance President Bush’s
Enterprise for ASEAN Initiative (EAI), under which we are working to
enhance our trade and
economic ties to ASEAN countries. Our FTA with
Singapore entered into force on January 1, 2004. In
addition, we have
TIFAs with Thailand, Indonesia, the Philippines, and Brunei Darussalam,
and have nearly concluded negotiations on a TIFA with Malaysia. Under
these TIFAs, the
United States is seeking to address outstanding
bilateral issues and enhance our coordination
on regional and
multilateral issues. In addition, we are meeting the need for a stronger U.S.
economic presence in the region and laying the groundwork for FTAs with
these nations, when ready.
ASEAN members already are negotiating FTAs
with many of their other major trading
partners. An FTA with Thailand
would promote U.S. interests in the region, encourage the
negotiation
of trade agreements with the high standards inherent in FTAs with the United
States, and
reinforce a strong U.S.-ASEAN relationship that is a force
for stability and development in
Southeast Asia.
In addition to complementing our cooperative efforts with Thailand
on global and regional trade issues, an FTA would further enhance our
broader relationship with
Thailand. An FTA would reinforce the shared
interests of the United States and Thailand
and promote common values,
facilitating our efforts to work together on a wide range of
issues.
Thailand already is a key ally in the region on military and security matters.
We are partners in
the global war on terrorism, and the extensive ties
between the U.S. and Thai militaries
bolster U.S. strategic interests
in the region.
While we see substantial benefits in pursuing an FTA with
Thailand, we also are considering carefully other issues that some
Members of Congress and
non-governmental organizations have raised
regarding Thailand’s policies. There are an array of
difficult human
rights, labor, environment, and governance issues. We will continue to consult
closely with Congress as we consider how to address these issues in the
context of an FTA. We
recognize other concerns raised by Members of
Congress, and the Administration looks
forward to continued
consultations with Congress on the full range of issues.
Initial consultations with the Congressional Oversight Group (COG)
and other Members of Congress regarding the FTA negotiations with
Thailand have been
positive, and our decision to move ahead with
negotiations with Thailand was strongly influenced
by the bipartisan
expressions of interest we have received from Members of Congress
and
U.S. industry. The Administration will continue to consult closely with the
Congress,
including the Congressional Oversight Group, throughout the
negotiation process.
Our specific objectives for negotiations with Thailand are as
follows:
· Trade in
Goods:
- Seek to eliminate tariffs and other duties and charges on
trade between
Thailandvand the United States on the broadest possible
basis, subject to
reasonablevadjustment periods for import-sensitive
products.
- Seek to eliminate non-tariff barriers in Thailand to U.S.
exports, including permit and licensing barriers on agricultural and
other products,
restrictive administration of tariff-rate quotas,
unjustified trade
restrictions that affect new U.S. technologies, and
other trade restrictive measures that U.S.
exporters identify.
- Seek to eliminate government practices that adversely
affect U.S.
exports of perishable or cyclical agricultural products,
while improving U.S.
import relief mechanisms as appropriate.
- Pursue a mechanism with Thailand that will support
achieving the U.S.
objective in the WTO negotiations of eliminating all
export subsidies on
agricultural products, while maintaining the right
to provide bona fide food aid
and preserving U.S. agricultural
market development and export credit
programs.
- Pursue fully reciprocal access to Thailand market for U.S.
textile and
apparel products.
· Customs Matters, Rules
of Origin, and Enforcement
Cooperation:
- Seek rules to require that Thailand’s customs operations
are conducted
with transparency, efficiency, and predictability, and
that customs
laws, regulations, decisions, and rulings are not applied
in a manner that would
create unwarranted procedural obstacles to
international trade.
- Seek rules of origin, procedures for applying these rules,
and
provisions to address circumvention matters that will ensure that
preferential
duty rates under an FTA with Thailand apply only to goods
eligible to receive such
treatment, without creating unnecessary
obstacles to trade.
- Seek terms for cooperative efforts with Thailand regarding
enforcement
of customs and related issues, including in the area of
trade in
textiles and apparel.
· Sanitary and
Phytosanitary (SPS) Measures:
- Seek to have Thailand reaffirm its WTO commitments on SPS
measures
and eliminate any unjustified SPS restrictions.
- Seek to strengthen collaboration with Thailand in
implementing the WTO
SPS Agreement and to enhance cooperation with
Thailand in relevant
international bodies on developing international
SPS standards, guidelines,
and recommendations.
· Technical Barriers to
Trade (TBT):
- Seek to have Thailand reaffirm its WTO TBT commitments and
eliminate
any unjustified TBT measures.
- Seek to strengthen collaboration with Thailand in
implementing the WTO
TBT Agreement and create a procedure for
exchanging information with
Thailand on TBT-related issues.
· Intellectual Property
Rights:
- Seek to establish standards to be applied in Thailand that
build on the
foundations established in the WTO Agreement on
Trade-Related Aspects of
Intellectual Property Rights and other
international intellectual property
agreements, such as the World
Intellectual Property Organization (WIPO) Copyright
Treaty, the WIPO
Performances and Phonograms Treaty, and the Patent
Cooperation
Treaty.
- In areas such as patent protection and protection of
undisclosed
information, seek to have Thailand apply levels of
protection and practices more in
line with U.S law and practices,
including appropriate flexibility.
- Seek to strengthen Thailand’s laws and procedures to
enforce
intellectual property rights, such as by ensuring that Thai
authorities seize suspected
pirated and counterfeit goods, equipment
used to make such goods or to
transmit pirated goods, and documentary
evidence.
- Seek to strengthen measures in Thailand that provide for
compensation
of right holders for infringements of intellectual
property rights and to
provide for criminal penalties under Thai law
that are sufficient to have a
deterrent effect on piracy and
counterfeiting.
· Trade in
Services:
- Build upon rights in the U.S.-Thailand Treaty of Amity and
Economic Relations to develop broader disciplines to address discriminatory and
other
barriers to trade in Thailand’s services markets. Seek improved
transparency and
predictability of Thai regulatory procedures,
specialized disciplines for financial
services, and additional
disciplines for telecommunications and other sectors as
necessary.
- Pursue a comprehensive approach to market access, including
any
necessary improvements in access to the telecommunications,
financial
services, professional services, or other sectors.
· Investment:
- Seek to establish rules that reduce or eliminate artificial
or
trade-distorting barriers to U.S. investment in Thailand, while
ensuring that Thai
investors in the United States are not accorded
greater substantive rights with
respect to investment protections than
U.S. investors in the United States,
and to secure for U.S. investors
in Thailand important rights comparable to those
that would be
available under U.S. legal principles and practice.
- Seek to ensure that U.S. investors receive treatment as
favorable as
that accorded to domestic or other foreign investors in
Thailand and retain the
preferences they currently receive under the
U.S.-Thai Treaty of Amity and Economic
Relations and to address
unjustified barriers to the establishment and
operation of U.S.
investments in Thailand. Provide procedures to resolve disputes
between
U.S. investors and the Government of Thailand that are in keeping with
the Trade Promotion Authority goals of being expeditious, fair, and
transparent.
· Electronic
Commerce:
- Seek to have Thailand affirm that it will allow U.S. goods
and services
to be delivered electronically to its market and to ensure
that Thailand
does not apply customs duties to digital products or
unjustifiably discriminate
among products delivered electronically.
· Government
Procurement:
- Seek to establish rules requiring government procurement
procedures
and practices that are fair, transparent, and predictable
for
suppliers of U.S. goods and services that seek to do business with
Thailand, and that ensure
that U.S. suppliers receive treatment as
favorable as that accorded to domestic or
other foreign suppliers in
Thailand.
- Seek to expand access for U.S. goods and services to
Thailand’s
government procurement market.
· Transparency/Anti-Corruption/Regulatory
Reform:
- Seek to make Thailand’s administration of its trade and
investment
regime more transparent, and pursue rules that will permit
timely and
meaningful public comment before Thailand adopts trade- and
investment-related
measures.
- Seek to eliminate Thailand’s government regulations or other
measures that discriminate against or deny full market access for U.S.
exporters
or investors.
- Seek to ensure that Thailand applies high standards prohibiting
corrupt practices affecting international trade and investment and
enforces such
prohibitions.
· Competition:
- Address possible issues involving competition-related matters,
if appropriate.
· Trade
Remedies:
- Provide a safeguard mechanism during the transition period
to allow a
temporar revocation of tariff preferences if increased
imports from
Thailand are a substantial cause of serious injury or
threat of serious injury to
the domestic industry.
- Make no changes to U.S. antidumping and countervailing duty
laws.
· Environment:
- Seek to promote trade and environment policies that are
mutually
supportive.
- Seek an appropriate commitment by Thailand to effectively
enforce
its environmental laws.
- Establish that Thailand will strive to ensure that it will
not, as an
encouragement for trade or investment, weaken or reduce the
protections provided
for in its environmental laws.
- Help Thailand strengthen its capacity to protect the
environment
through the promotion of sustainable development, such as
by establishing
consultative mechanisms.
• Labor, including Child
Labor:
- Seek an appropriate commitment by Thailand to enforce
effectively its
labor laws, particularly those relating to
internationally-recognized
labor rights and prohibiting the worst forms
of child labor.
- Establish that Thailand will strive to ensure that it will
not, as an
encouragement for trade or investment, weaken or reduce the
protections provided
for in its labor laws.
- Based upon review and analysis of Thailand’s labor law and
practices,
establish procedures for consultations and cooperative
activities with
Thailand to strengthen its capacity to promote respect
for core labor
standards, including compliance with ILO Convention 182
on the worst forms of child
labor.
• State-to-State Dispute
Settlement:
- Encourage the early identification and settlement of disputes
through consultation.
- Seek to establish fair, transparent, timely, and effective
procedures to settle disputes arising under the agreement.
In addition, the FTA with Thailand will take into account other
legitimate U.S. objectives including, but not limited to, the
protection of health, safety,
environment, essential security, and
consumer interests.
We are committed to concluding these negotiations with timely and
substantive results for U.S. workers, consumers, businesses, and
farmers, and will pursue these
specific objectives, keeping in mind the
overall and principal U.S. negotiating objectives and
priorities that
the Congress has identified. We look forward to continuing to work with the
Congress as negotiations with Thailand begin, and we commit to work
with you as we bring them to
a successful conclusion.
Sincerely,
Robert B. Zoellick