Apr. 20, 2016

Don Pramudwinai


Don Pramudwinai

Minister of Foreign Affairs, Thailand

"Thailand is actively working to strengthen economic ties with all partners."


Don Pramudwinai studied political science at the University of California and obtained master’s degrees in international relations from the same institution and The Fletcher School of Law and Diplomacy. He joined the Ministry of Foreign Affairs in 1974 and has held a number of roles, including Minister of the Royal Thai Embassy in London and Director General of the Department of East Asian Affairs. Later positions also included Ambassador of Thailand to the EU, Belgium, and Luxembourg, and Ambassador to the US. He became Minister of Foreign Affairs in 2015 after having served as Deputy Minister.

What does Thailand's integration into the ASEAN Economic Community (AEC) mean for the country's diplomatic standing in the region and beyond?

Thailand, one of the founding members of ASEAN in 1967, sees the launch of the AEC on 31, December 2015 as a key milestone for ASEAN. We believe it will raise the diplomatic standing of all its members for good reason. Above all, economic integration will bring tangible benefits to more than 600 million people in the region. Intra-ASEAN trade grew 10.5% on average during 1993-2013. ASEAN has also been outward looking. Beyond its own region, ASEAN has established five FTAs with six dialogue partners and is soon to conclude the Regional Comprehensive Economic Partnership (RCEP) with the six dialogue partners. RCEP will be one of the largest FTAs in the world, with the potential to stimulate trade and investment for Asia and improve the livelihoods of half of the world's population. Thailand will actively cooperate with other members to achieve the AEC vision for 2025: an economic community that is highly integrated, competitive, dynamic, people-centered, and engaged at the global level. Team effort by the 10 members will push ahead important work such as trade and investment facilitation and further liberalization of the services sector so as to maintain the AEC as an attractive trade and investment destination for the international community. According to Baker & Mckenzie, it is projected that the AEC will realize its potential as the fourth-largest economy in the world by 2050. The AEC, as part of the ASEAN Community, will engage dialogue partners and stakeholders to ensure that the AEC remains relevant to the millions of people in the Community and beyond.

What are some of the most important provisions in the upgraded ASEAN-China FTA as it pertains to Thailand's economy?

The successful upgrade of the ASEAN-China Free Trade Agreement (ACFTA) on November 21, 2015 will help ensure that our region remains resilient in the face of a slowdown in global economic growth. The ACFTA was signed over 10 years ago and the upgrade was long overdue. As ASEAN's first FTA with a trading partner, ACFTA has helped to propel the establishment of other ASEAN+1 FTAs. The ACFTA upgrade will improve trade and investment opportunities between ASEAN and China through more facilitative customs procedures, more options for rules of origin, increased liberalization of services, increased investment promotion and facilitation, and increased areas for economic and technical cooperation. Thailand's private sector will find the new rules of origin more flexible to use. As a result, more than 2,000 goods from Thailand could gain greater access to China. Such goods include chemicals, leather, wood and wooden products, garments, and steel products. As the service sector is an increasingly important driver of economic growth for the ASEAN Economic Community, ASEAN stands to benefit from greater opportunities arising from the newly liberalized services sector in China, such as tourism and financial services (in the area of securities), construction, and engineering. Thailand will explore business opportunities in the tourism sector as this is an area of strength for Thailand and there is yet more room for people-to-people connectivity between ASEAN and China. Moreover, all parties stand to gain from measures such as investment promotion, industrial complementarity and production networks, information exchanges, and one-stop investment centers. Thailand hopes that the ACFTA upgrade will boost trade and investment between ASEAN and China and help to achieve the targets set by leaders for $1 trillion in trade by 2020 and $150 billion in investment by 2021.

Thailand has been commended for exploring business opportunities and securing free trade agreements (FTA) with new partners from across the world, including Pakistan, Russia, Turkey, and Iran. How important is it for Thailand to build diplomatic and economic ties with less traditional partners?

To remain competitive and drive the economy forward in this changing global economic landscape, Thailand is actively working to strengthen economic ties with all partners, both traditional and less traditional. During the last few decades, the Thai government has focused on export-oriented policy, and relies heavily on exports to drive the local economy. Today, maintaining export share in key traditional markets, and expanding our network of FTAs, remain high on the government agenda, but it is only one of the approaches that we are taking. Our policy formulation has accounted for global economic uncertainties such as the slowdown in the Chinese market, sharp fluctuation in oil and commodities prices, the rise in the US interest rate, and the economic crisis in Europe. Once all these factors are taken into consideration, it becomes apparent that no longer can we rely exclusively on our exports to traditional markets. South-South trade and investment have become strategically more and more important. In fact, working with less traditional partners is not a new policy. For years, Thailand has had economic cooperation with many developing countries. Among this is development cooperation based upon His Majesty the King's sufficiency economy philosophy, in which Thailand has provided assistance, exchanged good practice, and shared experiences in the application of the sufficiency economy to Lesotho, Timor-Leste, Cambodia, Lao PDR, Myanmar, Indonesia, Afghanistan, Jordan, Senegal, Mozambique, and so on. Our goal is to help uplift the wellbeing and welfare of local communities in order to ensure sustainable and inclusive development. Thailand fully recognizes the economic potential in fast growing markets such as Turkey, Iran, Pakistan, and Russia. We have always maintained cordial and healthy relations with these partners. For Thailand, the global economic situation has reinforced the need for Thailand to look beyond our traditional markets. Therefore, we are currently negotiating FTA with Turkey and Pakistan, while exploring closer economic ties with Russia and Iran. A high-level delegation led by our Deputy Prime Minister recently paid a successful visit to Iran, while our Prime Minister is scheduled to visit Russia in May 2016. Thailand has recently been approached by Russia to consider negotiating an FTA with the Eurasian Economic Union. We are currently exploring the possibility of such negotiations. Moreover, we have indicated our interest in joining the Trans-Pacific Partnership (TPP). Thailand is currently in the process of assessing obligations and challenges relating to TPP. We also look forward to the resumption of negotiations on the Thai-EU FTA.

What are your expectations for the year ahead?

The year ahead will see an increasingly globalized and interconnected world. There will likely be many challenges including threats and problems that know no boundary. At the same time, opportunities will be immense. A key to handle this is to further strengthen and expand international cooperation. This year Thailand has set out to play a leading and constructive role in the global arena, particularly among developing countries. As chair of G-77, we aim to reinforce South-South cooperation especially in moving toward the realization of sustainable development goals (SDGs) in the longer term. We are also laying down a 20-year strategy for the country that will provide guidelines for our positioning in the years ahead. Our goal is for the country to achieve stability, prosperity, and sustainability. The priorities of the current Thai government are to enhance the country's strength in various ways, including increasing Thailand's competitiveness. This is done by restructuring the economy in many ways. The government has, among other things, designated high-priority clusters with potential for development with incentives for investment. We also prioritize supporting startups and SMEs, providing funds for investment at local levels, and enhancing ease of doing business by improving laws and regulations. At the same time, we aim to increasingly contribute to the security and development of the international community. Our role as chair of G-77 as said before is one clear example. On a side note, relations with the UAE and the Middle Eastern region as a whole are important to us. As Thailand and the UAE key trading partners, the year ahead should see closer cooperation and interaction between our two countries and peoples. While each of us can act as hubs and gateways for our respective regions so as to encourage more trade and investment, we must also strengthen cooperation in other important areas including energy and tourism.