Investors urged towards Japan

Investors urged towards Japan

Concluded Asean pact benefits service sector

Chutima Bunyaphasara
Chutima Bunyaphasara

Thai investors are being urged to tap into the service sector in Japan, as Asean and Japan are scheduled to sign a pact on trade in services, worker movement and investment this August.

Deputy Commerce Minister Chutima Bunyaphasara said Asean and Japan concluded the negotiations on trade in services, the movement of natural persons, and investment under the Asean-Japan Comprehensive Economic Partnership (AJCEP) late last year.

Once signed, the pact is expected to come into force on Dec 1, 2018, allowing Thai businesses to invest wholly in the service sector there, including advertising, catering, conferences, tour-related services, exhibitions, hotels, property, spas, restaurants, and distribution, she said.

"Thai investors should learn more about the benefits of the pact and take this opportunity to seek out investment opportunities in the service sector in Japan," said Ms Chutima at a seminar on Thailand-Japan strategic partnership.

"For trade in goods, there are hardly any obstacles, as most of the products shipped to Japan are tariff-free under the aegis of the Japan-Thailand Economic Partnership Agreement [JTEPA] and AJCEP."

The JTEPA is a free-trade agreement between Thailand and Japan. The agreement eliminates tariffs on more than 90% of bilateral trade over 10 years. It was signed on April 3, 2007 in Tokyo and came into force on Nov 1, 2007.

The initial AJCEP was signed by Asean and Japan on April 14, 2008. The comprehensive agreement complements and expands the coverage of the bilateral economic partnership agreements (EPAs) that Japan has forged with five of the largest countries in Asean: Singapore, Malaysia, the Philippines, Thailand and Indonesia.

The AJCEP represents a mandate and a mechanism to push the agenda for further liberalisation of goods and services as well as investments beyond the scope and quality of the bilateral EPAs. The agreement pushes for the establishment of a legal framework for such comprehensive economic partnerships among the parties, which would institutionalise trade and investment liberalisation as a guiding principle in the regional integration process.

Ms Chutima said Thailand has been open since 2009 to Japanese and Asean investment in the service sector, allowing them to take a 49% stake in local service businesses including telecommunications, finance, property, electronics and delivery services.

She said Japan expands investment in Thailand every year, with the Thai government trying hard to lure more investment from Japan in its 10 targeted industries and the flagship Eastern Economic Corridor (EEC).

The 10 industries are next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.

Japan is the country's second-largest trading partner, and the third-largest export destination. Two-way trade between Thailand and Japan recorded continuous growth over the past 10 years, with trade values amounting to US$54.3 billion (1.7 trillion baht) in 2017, with exports from Thailand representing $22.3 billion and imports worth $32.0 billion.

Japan's direct investment in Thailand was worth 133 billion baht in 256 projects in 2017.

In a separate development, Prime Minister Somkid Jatusripitak said yesterday Japanese companies remain confident in Thailand, with the EEC due to become the key component that attracts Japanese investment this year.

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