THAI CONCERN ABOUT POSSIBLE U.S. TRADE

UNCLAS BANGKOK 000370 SENSITIVE SIPDIS STATE FOR EAP/MLS, EEB STATE PASS TO USTR FOR WEISEL AND BISBEE TREASURY FOR SCHUN AND MNUGENT COMMERCE FOR EAP/MAC/OKSA COMMERCE PASS TO USPTO SINGAPORE FOR FINATT BAKER E.O. 12958: N/A TAGS: ECON ETRD KPAO TH SUBJECT: THAI CONCERN ABOUT POSSIBLE U.S. TRADE PROTECTIONISM ¶1. (SBU) Commerce Minister Porntiva Nakasai told the Ambassador on February 11 that Thailand is concerned about the potential for trade protectionism represented by "Buy American" provisions in the proposed stimulus bill. In a "Meet the Minister" meeting organized by the Embassy to provide an opportunity for U.S. company reps to discuss doing business issues, ComMin Porntiva stressed that Thailand supports open markets, and questioned how a "Buy American" policy would be implemented and whether it would be consistent with WTO commitments. The Ambassador responded that the stimulus bill is still a work in progress and that President Obama has said that he is aware of the dangers of protectionism and does not want the bill to be seen as protectionist. The Amcham Executive Director added that the U.S. business community opposes "Buy America" provisions. ¶2. (U) The Thai press in recent days has run several articles implying that the U.S. is embarking on protectionist policies under the Obama administration. One article, discussing the implementation of Amendments to the Lacey Act that will curb U.S. imports of tropical hardwoods as an environmental measure, quoted a Thai commercial consul in the U.S. as saying that "the new legislation is intended to serve as a non-tariff barrier to imports to the U.S. during tough times." The amendment of the Lacey Act was of course passed last year before the financial crisis even began, but genuine concern, as well as misunderstanding, is starting to fuel the impression that U.S. trade policy is changing. Several prominent Thai business people have also expressed concern to us that the U.S. is starting to close its doors to foreign products. ¶3. (SBU) Comment and request: The Prime Minister and other top government and business leaders have reiterated their support for free trade and understand that Thailand,s export-oriented economy would likely be badly affected if global markets were to close doors to any extent. Nevertheless, protectionist tendencies among some influential Thai elites are just below the surface and there is a danger that widespread talk of U.S. protectionism could turn into a justification for Thai protectionism. Clarity on the U.S. policy on trade under the new administration would be very welcome. This Embassy could make good use of talking points on the subject as soon as Washington is able to provide them. JOHN