Office of the United States Trade Representative


United States and Thailand Conclude Fourth Round of FTA Talks

GREAT FALLS, MONTANA - The United States and Thailand concluded the fourth round of Free Trade Agreement (FTA) negotiations in Great Falls, Montana today. The United States Government is pleased with the progress that was made and hopes to conclude the FTA in early 2006. The U.S. delegation appreciated the invitation of Senator Max Baucus to hold this round in Montana and is grateful for the warm hospitality that the Great Falls community and Montana provided during the talks.

The United States-Thailand FTA will generate solid economic benefits for both the United States and Thailand. The United States is already Thailand's second largest source of imports, with U.S. business shipping $6.4 billion in exports to Thailand last year. Removing existing trade barriers will create new opportunities for U.S. businesses in both goods and services, spurring economic growth, boosting American living standards and supporting higher paying jobs. It also helps to ensure that U.S. businesses and workers are not put at a disadvantage with their key competitors from countries such as China and Australia, which already have preferential trade agreements with Thailand.

The FTA will be particularly beneficial for U.S. agricultural producers. The United States is currently the top supplier to Thailand of agricultural products, selling cotton, wheat, soybeans and soybean meal, hides and skins, prepared animal feed, dairy products, and processed foods. The FTA will further open and diversify sales for these and other products, such as beef and pork, to this major market for U.S. farmers and ranchers.

The U.S. and Thai teams made progress on the range of issues covered by the FTA. Like other U.S. FTAs, this Agreement will be comprehensive in its coverage, while taking into account the sensitivities on both sides.

In Montana, the U.S. and Thai teams had the opportunity to meet with a wide range of representatives of the Montana business community. The two teams visited Montana farms, ranches, and other agricultural enterprises, as well as the local small business development center and other state-based businesses. These visits highlighted the importance of both the primary and value-added agriculture sectors and small businesses to the U.S. economy. In addition, U.S. and Thai trade negotiators met with national and regional businesses, including the telecommunications, express delivery, financial services, autos, energy, and other goods and services sectors.

The progress made during this round will position the United States and Thailand well for further progress in the next round to be held in late September.


Benefits for Montana

An FTA with Thailand offers great potential for Montana's farmers, ranchers, other goods and services providers, as well as its workers and consumers. In 2003, Thailand was Montana's 39th largest export market. Montana exported just over $725,000 in agricultural and industrial goods to Thailand last year. Reducing Thailand's average bound tariff of 35 percent on agricultural products will make Montana's farmers significantly more competitive, opening up new export opportunities.

The Montana agriculture sector in particular will benefit from a U.S.-Thailand FTA. Wheat is Montana's top export to Thailand with nearly $400,000 shipped in 2004 and exports in 2005 already exceeding that amount.

Eliminating Thailand's tariffs and other barriers will benefit a wide range of Montana agriculture producers, including wheat, flour, beef, potato, french fry, grain, barley, pea and lentil, animal feed, and pork producers. Across the region, producers of soybeans, cotton, coffee, processed foods, fruits and vegetables, and other agricultural goods will benefit.

Other Montana and regional goods and services providers will be able to take advantage of increased opportunities from a U.S.-Thailand FTA. U.S. businesses sell information technology products, transportation and other equipment, medical devices, chemicals, and plastics to Thailand, as well as a multiple services, including express delivery.

US-Thailand Free Trade Agreement

In 2003, President Bush announced his intent to enter into FTA negotiations with Thailand in accordance with the legislative procedures specified by Congress. This FTA reaffirms the President's commitment under his Enterprise for ASEAN Initiative, which offers the possibility of FTAs to ASEAN members with which the U.S. has a bilateral Trade and Investment Agreement (TIFA), that are WTO members, and are committed to economic reforms and openness.

The first round of U.S.-Thailand FTA negotiations was held in July 2004, with successive rounds held in October 2004 and April 2005. Negotiating groups also held meetings between rounds to lay the groundwork for a successful fourth round.

Total trade between the United States and Thailand was $24 billion in 2004, up nearly 11 percent from the previous year and nearly doubling in the last decade. U.S. goods exports totaled $6.4 billion, an increase of 10.3 percent since 2003. Exports of Thai goods to the United States grew 15.8 percent last year to $17.6 billion. U.S. services exports to Thailand totaled $1.1 billion in 2003 (the latest available data), while Thailand's exports of services to the United States were $739 million. The stock of U.S. foreign direct investment in Thailand in 2003 was $7.4 billion, making the United States the largest foreign investor in Thailand.

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