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'Legal changes won't violate WTO rules'


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Bangkok Post

30 dec 2006

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INVESTMENT / FOREIGN OWNERSHIP

 

'Legal changes won't violate WTO rules'

PHUSADEE ARUNMAS

 

Authorities insist Thailand can go ahead with plans to change the Foreign Business Act, under which both voting rights and shareholdings would be used to determine whether a business is considered foreign, without breaching its commitments to the World Trade Organisation (WTO).

 

Such changes were within Thailand's rights, said Chutima Boonyaprapas, the head of the Trade Negotiations Department at the Commerce Ministry.

 

The WTO, she said, had few explicit conditions outlining what individual countries should do in opening their local businesses to foreigners.

 

''Thailand has commitments only to open freely certain businesses such as consulting services under the General Agreement on Trade in Services (Gats), a key part of the WTO,'' she said.

 

''We may reconsider those businesses again to see whether the changes will affect them and whether any compensation needs to be paid if those businesses are really affected.''

 

Officials said the country had made no commitments under the WTO to fully liberalise key businesses such as wholesale and retail trade for foreigners.

 

They were responding to comments by some analysts who warned that proposals to change the Foreign Business Act (FBA) might run counter to Thailand's commitments to the WTO and free trade agreements on market liberalisation.

 

Commerce Minister Krirk-krai Jirapaet hoped to forward the proposed amendments to the 1999 FBA to the Cabinet in early January, according to a ministry source.

 

A ministry-appointed committee headed by Pramon Sutiviong on Tuesday presented its recommendations for legal amendments.

 

Mr Pramon, who is also the chairman of the Thai Chamber of Commerce, said the revised law would say that companies controlled by foreigners in terms of voting rights would be classified as foreign, even if their direct shareholdings were in a minority.

 

The ministry had previously only used direct shareholdings in assessing compliance with the FBA, which limits foreign shareholdings to 49% in a number of key service sectors including telecommunications.

 

The FBA has been in the spotlight since early this year when Temasek Holdings of Singapore took over Shin Corp, the telecoms conglomerate founded by former prime minister Thaksin Shinawatra. Officials claimed Temasek used a complex structure involving Thai nominees to effectively gain majority control, a contention Temasek has denied.

 

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I think they will surprised.... :) This stinks:

 

Mr Pramon, who is also the chairman of the Thai Chamber of Commerce, said the revised law would say that companies controlled by foreigners in terms of voting rights would be classified as foreign, even if their direct shareholdings were in a minority.

 

The ministry had previously only used direct shareholdings in assessing compliance with the FBA, which limits foreign shareholdings to 49% in a number of key service sectors including telecommunications.

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I've said it all along, the game in Thailand is rigged and the rules subject to change whenever they feel like it. They want it all for themselves, and will cut off their own noses to spite their face. I have every confidence these ninnies will screw it up so badly that they'll stay a banana republic for another few decades.

 

Now with the bombings in BKK we'll see how tourism is affected as well. I think the Thais will be living in 'interesting times' this coming year. It doesn't look good. Glad I'm living up in Surin, but who knows what will go down here as well. Depends on who is behind the bombings as to where this might lead. It will not be good for tourism no matter who did this though, and add on the recent financial screw up and this change of the ownership laws/designations for business and all I can see is a big mess and a chilly climate here.

 

Cent

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Even assuming that the changes don't drift foul of the WTO, the effect on foreign direct investment would be enormous. Either they don't get it, or the people running the show see quick baht coming their way as a result of the changes. And don't care about the shock to the foreign investment community (and the long term losses to thailand).

 

But its there country and they have a right to run it their way...

 

:xmascheer

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They do, i agree, but there is such a thing as common sense...

 

This is just another example of creeping nationalism, which the ultra conservatives espouse...which of course is really about money and holding onto as much of it as possible...

 

Yes...it stinks, but only if you are a foreigner...if you are Thai, then i would imagine the ruling elite are wringing their collected hands with glee...dreaming of the Baht coming their way..

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And I've said it before and will say it again. Thailand's economy is controlled by a fairly small group of very wealthy Chinese-Thai families that fought their way to the top. They are not about to allow any other group -- foreign or domestic -- to threaten that hold.

 

 

p.s. About the only time the Chinese-Thais are not actually runnng the country is when the military does take over! The military traditionally has been the way for ethnic Thais and Isaan folks to get a foot in the door.

 

 

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