WTO SERVICES NEGOTIATIONS: THAILAND RESPONSE

UNCLAS BANGKOK 006154 SIPDIS STATE FOR EB/TPP/MTA NISSEN USTR FOR AMANDA HORAN/CHRISTINE BLISS E.O. 12958: N/A TAGS: ECON ETRD WTRO SUBJECT: WTO SERVICES NEGOTIATIONS: THAILAND RESPONSE REF: SECSTATE 176381 ¶1. Econoff contacted Ministry of Commerce's Department of Trade Negotiation (DTN) officials per reftel regarding the Thai offer on trade in services. Answers are keyed to questions in reftel. ¶2. Q: Has the host government stated specifically that its offer is tied to further movement in agriculture negotiations, concessions on temporary entry, rules or other factors? Would the host government likely be prepared to table an initial or revised services offer pending movement in these areas, in particular agriculture? A: DTN sent a revised services offer to their offices in Geneva in mid-September. DTN's Geneva office is reviewing the offer for any necessary technical corrections and estimate they will submit the revised offer to the WTO by the end of September. ¶3. Q: What ministries, government officials or other entities, including the legislature, play a role in decisions on services? What players are likely to have the most influence in determining the extent of the host government's services offer? A: Individual line ministries have responsibility for services decisions, i.e. the Ministry of Education will have purview over issues involving education services. The Ministry of Commerce plays a coordinating role. Commerce's Department of Trade Negotiations has the responsibility for drafting the services offer. ¶4. Q: Are there particular domestic constituencies that support or oppose services liberalization? What are they? Are they significant? What is the main reason for their support or opposition? A: The finance and transportation industries in particular are concerned about services liberalization, emphasizing the need for additional adjustment periods in order to better compete in a liberalized market. Professional organizations, for example the institute of certified accountants, have expressed opposition to liberalizing their industries out of a fear of increased competition. ¶5. Q: What are the host country's sensitivities with regard to services sector opening? Do host government officials appreciate that, with the approach of the Hong Kong Ministerial and the negotiating deadline next year, it is critical that services offers be tabled immediately? A: Financial services liberalization is the most sensitive issue as the effects of the 1997 Asian financial crisis are still fresh in the minds of Thais. Insurance and securities sectors of financial services are less sensitive, but banking services are of particular concern. Thailand insists on tight controls over capital flows, and regulatory flexibility for the Central Bank to manage the financial system. Thai officials are aware of next year's deadline and will soon be submitting their revised offer in recognition of the time constraints. BOYCE