17 - Thailand's Perspective on the Role of the Private Sector in the Process of Regional Integration

Summary

The ASEAN Free Trade Area (AFTA) was one of the first ASEAN attempts towards integration of its member nations. Moving towards a zerotariff zone between its members is one result many regard as a success to date. Some argued initially that ASEAN nations produced similar products and were prone to compete more than cooperate, but this has proved to be wrong. In fact AFTA has been successful in expanding intraregional trade. For example, in the case of Thailand, the total trade (exports plus imports) with ASEAN nations increased from 17 per cent of her total trade in 1995 to 20 per cent in 2007, and ASEAN became the largest trade partner of Thailand. Thailand's FDI, as well as that of other ASEAN members, increased substantially and in the last five years ASEAN experienced a surge in capital inflows.

With the rise of China and India and in an increasingly globalized world, to remain competitive, ASEAN needs to move further along the integration path. The ASEAN Economic Community (AEC) therefore Thailand's Private Sector's Role in Regional Integration 287 represents a reaction to global competition and a means of maintaining a balance of trade and investment with China and India. In 2007 ASEAN agreed with the AEC Blueprint, which included plans to continue the integration process towards “a single market” by 2015. Given that the ASEAN Blueprint has been put in place for more than three years, it is timely to examine its progress, including the role of the private sector in the process of ASEAN integration.

This chapter will focus on how Thai private businesses have responded to the single market initiative. The remainder of the chapter is structured as follows. The first section illustrates the level of Thai private business usage of the AFTA. The second section summarizes the private sector's opinions on AFTA usage, using the results of in-depth interviews. Results from questionnaires distributed at a focus group with members of the Thai Chamber of Commerce are provided in the third section. The final section provides recommendations for further implementation and a conclusion.