Thailand's new trade
opportunities with Indonesia
under the new Asean
Free Trade Area (AFTA)
By Jon Fernquest 
Thailand's
new trade opportunities with Indonesia under the new Asean Free
Trade Area (Afta)
starting this year was discussed in this week's Asia Focus section in the Bangkok Post
on Monday. Today's article starts below.
Asean Free Trade Area (AFTA) - the
grouping of Southeast Asian states working together to make trading in
the region easier (Brunei, Indonesia, Malaysia, Philippines, Singapore,
Thailand. Vietnam, Laos, Myanmar and Cambodia) (See Wikipedia)
Economics
ASIA FOCUS
Bright future for Thai exports to Indonesia seen under Afta
8/03/2010Thailand's exports to Indonesia will benefit from tariff cuts under the Asean Free Trade Area (Afta) as well as the outstanding growth of the Indonesian economy, which has led all countries in Asia except China, despite the impact of the global economic slowdown.
Indonesia is an interesting market for Thai exporters not only because it is the largest in Asean but also because it is part of the same production chain as the Thai economy, according to Kasikorn Research Center.
benefit
- to get help or an advantage from something ผลประโยชน์
tariff - tax on imports
outstanding - very great and noticeable, amazing
impact - an effect or influence ผลกระทบ
global - throughout the world ทั่วโลก
chain - a group of businesses (restaurants, hotels, etc.) owned by the same company บริษัทต่างๆที่อยู่ในเครือเดียวกัน
Kasikorn Research Center - Thailand's top private economic research center (See website)
tariff - tax on imports
outstanding - very great and noticeable, amazing
impact - an effect or influence ผลกระทบ
global - throughout the world ทั่วโลก
chain - a group of businesses (restaurants, hotels, etc.) owned by the same company บริษัทต่างๆที่อยู่ในเครือเดียวกัน
Kasikorn Research Center - Thailand's top private economic research center (See website)
In addition, the Indonesian economy has been able to grow impressively because of its relatively low reliance on the export sector, while the Jakarta government has been continuously injecting money to stimulate activity. Interest rates in Indonesia remain high at 6.5%, though that figure is a full three percentage points lower than the rate the central bank had a year earlier.
As a result, domestic consumption instead of exports is the major driver of the Indonesian economy, accounting for about 61% of GDP, which grew by 5.4% in the fourth quarter of 2009.
reliance - need for
something
sector - a part of the economy (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)
stimulate - act so as to increase activity กระตุ้น encourage activity, growth, and development (See glossary)
figure - an amount of money จำนวนเงิน
three percentage points - 1.0% ("three percentage points lower" = 3.0%)
rate - the level or speed at which something happens or changes, or the amount or number of times it happens or changes in a particular period อัตรา
central bank - the main bank in a country that controls the supply of money and credit (loans) in the economy (and also monetary policy to keep the economy growing at a steady rate with low inflation)
domestic - within the country ภายในประเทศ
consumption - goods and services that households (families) buy การบริโภค (See Wikipedia)
Gross Domestic Product (GDP) - a measure of economic activity in a country, the value of the country's output of goods and services. GDP is defined roughly as: GDP = Household Consumption + Business Investment + Change in Inventories + (Government Spending - Taxes) + (Exports - Imports) (See Economist Glossary)
sector - a part of the economy (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)
stimulate - act so as to increase activity กระตุ้น encourage activity, growth, and development (See glossary)
figure - an amount of money จำนวนเงิน
three percentage points - 1.0% ("three percentage points lower" = 3.0%)
rate - the level or speed at which something happens or changes, or the amount or number of times it happens or changes in a particular period อัตรา
central bank - the main bank in a country that controls the supply of money and credit (loans) in the economy (and also monetary policy to keep the economy growing at a steady rate with low inflation)
domestic - within the country ภายในประเทศ
consumption - goods and services that households (families) buy การบริโภค (See Wikipedia)
Gross Domestic Product (GDP) - a measure of economic activity in a country, the value of the country's output of goods and services. GDP is defined roughly as: GDP = Household Consumption + Business Investment + Change in Inventories + (Government Spending - Taxes) + (Exports - Imports) (See Economist Glossary)
The Indonesian economy is expected to face inflation in the second half of the year and its central bank will likely respond by increasing interest rates, but the country should nevertheless enjoy healthy growth in a range of 5.5% to 6.0% this year as the world economy recovers, says K-Research.
The value of bilateral trade between Thailand and Indonesia is also expected to recover into positive territory from the 26% contraction seen last year, said the centre.
expected
- believe will happen คาดว่า (จะเกิดขึ้น)
inflation - the level of prices rising in the economy as a whole ภาวะเงินเฟ้อ, อัตราเงินเฟ้อ (See Economist Glossary)
respond - to say or do something as a reaction to something that has been said or done ตอบสนอง, ตอบรับ
interest - payments made for the use of another's money for a period of time
range - several numbers betwee two numbers ระหว่าง, ช่วง
bilateral - involving two groups or countries เกี่ยวกับกลุ่มทางการเมืองสองกลุ่ม, สองข้าง
trade - the buying and selling of goods การค้าขาย
recover - when the situation improves and gets better, to become healthy and fit again after an illness or injury การฟื้นไข้
positive - good ที่ดี, hopeful and confident, or giving cause for hope and confidence ซึ่งมองในแง่ดี
territory - an area, original meaning: land which is considered as belonging to or connected with a particular country or person ดินแดน
contraction - decreasing in size, shrinking, growing smaller
inflation - the level of prices rising in the economy as a whole ภาวะเงินเฟ้อ, อัตราเงินเฟ้อ (See Economist Glossary)
respond - to say or do something as a reaction to something that has been said or done ตอบสนอง, ตอบรับ
interest - payments made for the use of another's money for a period of time
range - several numbers betwee two numbers ระหว่าง, ช่วง
bilateral - involving two groups or countries เกี่ยวกับกลุ่มทางการเมืองสองกลุ่ม, สองข้าง
trade - the buying and selling of goods การค้าขาย
recover - when the situation improves and gets better, to become healthy and fit again after an illness or injury การฟื้นไข้
positive - good ที่ดี, hopeful and confident, or giving cause for hope and confidence ซึ่งมองในแง่ดี
territory - an area, original meaning: land which is considered as belonging to or connected with a particular country or person ดินแดน
contraction - decreasing in size, shrinking, growing smaller
The elimination of tariffs on 8,625 categories of goods under Afta will be a key factor.
Thai intermediate and finished products exported to Indonesia will gain tariff advantages when competing against goods from Japan, South Korea, China, the US, Taiwan, Hong Kong, India, Saudi Arabia and other non-Asean countries.
However, Thai raw materials, including chemical products and plastics, will face intense competition from regional Asean rivals who all enjoy the same tariff benefits, while the quality of materials from these countries is largely the same.
tariffs
- taxes on imports (to make foreign goods less competitive in a
country) พิกัดอัตราภาษีศุลกากร
key - important คนสำคัญ
factor - a fact or situation which influences the result of something ปัจจัย
intermediate products - products that are used as parts or components in other products
finished products - the final product sold to consumers in stores
raw materials - materials in their natural state before being processed or used in manufacturing
intense - done with a lot of effort, energy, attention, etc. lots of activity เข้มข้น
competition - situation in which two or more people are trying to get something that not everyone can have
rivals - people you are competing with to achieve something that not everyone can have (like getting elected), opponents คู่แข่ง, คู่อริ
benefits - goods things that can happen from anm activity ผลประโยชน์
key - important คนสำคัญ
factor - a fact or situation which influences the result of something ปัจจัย
intermediate products - products that are used as parts or components in other products
finished products - the final product sold to consumers in stores
raw materials - materials in their natural state before being processed or used in manufacturing
intense - done with a lot of effort, energy, attention, etc. lots of activity เข้มข้น
competition - situation in which two or more people are trying to get something that not everyone can have
rivals - people you are competing with to achieve something that not everyone can have (like getting elected), opponents คู่แข่ง, คู่อริ
benefits - goods things that can happen from anm activity ผลประโยชน์
Overall, growth is expected for various Thai products, ranging from key export items such as automobiles and sugar, to less prominent products such as food and beverages.
The automobile sector in particular will benefit from the Indonesia's growing demand for Thai exports as the tariff elimination will cut production costs and allow Chinese and Japanese investors to expand auto production bases in Indonesia.
prominent
- important and well known สำคัญ, มีชื่อเสียง, เด่น
beverages - drinks (milk, fruit juice, beer) เครื่องดื่ม
X in particular - X is one example of what I am talking about
demand - people or consumers needing or wanting to buy goods and services ความต้องการ
elimination - ending, stopping, getting rid of
tariff elimination - ending tariffs
expand - to become larger ขายตัวออกไป
production bases - the places or factories where a company produces its product
beverages - drinks (milk, fruit juice, beer) เครื่องดื่ม
X in particular - X is one example of what I am talking about
demand - people or consumers needing or wanting to buy goods and services ความต้องการ
elimination - ending, stopping, getting rid of
tariff elimination - ending tariffs
expand - to become larger ขายตัวออกไป
production bases - the places or factories where a company produces its product
Another group of Thai products expected to enjoy good export growth from zero tariffs is electrical appliances, including both household and industrial products.
They include air-conditioners, water heaters, washing machines, food blenders, juice squeezers, microwave ovens, tape recorders, television sets and radios, lightbulbs, factory machinery, fire extinguishers, escalators, printers, electrical motors and power generators.
household
- a group of people, often a family, who live together ครัวเรือน
fire - ไล่ออก(จากงาน) terminate or end employment
food blenders - machines that are used to mix different things together when cooking (See Wikipedia)
juice squeezers, juicer - a tool for extracting juice from fruits, vegetables (See Wikipedia)
fire extinguishers - a device that sprays chemicals on a fire to put it out (See Wikipedia)
escalators - an electrical moving staircase for moving people between the floors of a building (See Wikipedia)
power - energy in the form of electricity produced in large quantities and used to operate lights, machines, and heating
power generators - machines that create power and electricity (used during blackouts when there is no electricity)
fire - ไล่ออก(จากงาน) terminate or end employment
food blenders - machines that are used to mix different things together when cooking (See Wikipedia)
juice squeezers, juicer - a tool for extracting juice from fruits, vegetables (See Wikipedia)
fire extinguishers - a device that sprays chemicals on a fire to put it out (See Wikipedia)
escalators - an electrical moving staircase for moving people between the floors of a building (See Wikipedia)
power - energy in the form of electricity produced in large quantities and used to operate lights, machines, and heating
power generators - machines that create power and electricity (used during blackouts when there is no electricity)
According to K-research, Thai food and agricultural goods are exported to Indonesia in low volumes but they too may gain opportunities to grow under Afta. Rice and sugar, however, are classified in the highly sensitive list (HSL) for Indonesia, allowing it to keep tariffs at 30-40.
Indonesia will continue to import rice and sugar from Thailand, currently the top rice exporter to Indonesia, but both goods will face competition from domestic producers as well as other Asean countries, Vietnam for rice and Singapore and Malaysia for sugar.
Indonesia also maintain a general exclusion list (GE) of 96 products such as alcoholic beverages, weapons, explosives and hazardous waste, but these will not have much impact on Thailand because of very low trade volumes, according to K-Research.
opportunities
- situations in which it is possible to do what you want or need to do,
benefits or profit that it is possible to get
classified - put some item (here rice and sugar) into a class or category (kind, type, sort)
sensitive - issue that needs to be dealt with very carefully ที่ละเอียดอ่อน
import - to buy or bring in products from another country นำเข้า
maintain a list - write things down on a list, produce a list that the public can see
exclude X (verb) - not include X
exclusion (noun) - the condition of not being include
explosives - substances or pieces of equipment that can cause explosions สิ่งที่ระเบิดได้
hazardous - dangerous, especially to people's health or safety
classified - put some item (here rice and sugar) into a class or category (kind, type, sort)
sensitive - issue that needs to be dealt with very carefully ที่ละเอียดอ่อน
import - to buy or bring in products from another country นำเข้า
maintain a list - write things down on a list, produce a list that the public can see
exclude X (verb) - not include X
exclusion (noun) - the condition of not being include
explosives - substances or pieces of equipment that can cause explosions สิ่งที่ระเบิดได้
hazardous - dangerous, especially to people's health or safety
(Source: Economics, ASIA FOCUS, Bright future for Thai exports to Indonesia seen under Afta, 8/03/2010, link)
