TOKYO, April 3 (KUNA) -- Japanese Prime Minister Shinzo Abe and visiting Thai Prime Minister Surayud Chulanont signed a free trade agreement (FTA) here Tuesday that will lift more than 90 percent of trade tariffs between the two countries.
"We believe that closer economic partnership between Japan and Thailand will accelerate sound economic development, promote the well-being of the peoples and contribute to the capacity building of both countries as well as the region," Abe and Surayud said in a joint statement.
"We also recognize the need to remove unnecessary barriers to cross-border flows of goods, investment, services and persons, and the necessity to work together and cooperate further in order to maximize the benefits of globalization for all," the statement said, adding that the signing of the accord will lay a solid foundation for an East Asian community.
Under the free trade deal, about 97 percent of Japanese exports to Thailand and 92 percent of Thai exports to Japan in terms of value will become duty-free within 10 years of its enforcement.
Japan will immediately scrap its tariffs on Thai processed shrimp and tropical fruit such as mangoes and durians, but it has excluded sensitive agricultural products for Japan such items as rice, wheat and starch from the list. Tariffs on almost all industrial products from Thailand will be also immediately removed.
Meanwhile, Thailand will cut tariffs on Japanese cars in the 3-liter-engine class or larger to 60 percent from the current 80 percent in the first four years. It will eliminate import tariffs on Japan's automobile parts by 2011 and on all steel products within 10 years.
The deal will also relax the terms of state-qualified Thai cooks working in Japan, but the two nations agreed to continue negotiations over the necessary requirements for nursing care workers. The accord also seeks to step up transparency and legal protections to help improve the climate in Thailand for Japanese investors.
The pact is expected to take effect in autumn after being endorsed by Japan's parliament. It was already approved by the Thai parliament. The two countries launched formal FTA talks in February 2004 and reached a basic agreement in 2005, with an eye to signing the agreement in the early part of 2006. But a coup by the Thai military last September to oust former Prime Minister Thaksin Shinwatra had left the fate of the FTA hanging.
Trade between the two countries last year was valued at JPY 4.7 trillion (USD 398.5 billion) in 2006, according to Japanese Finance Ministry data.
The treaty with Thailand is Japan's sixth such accord, after those with Singapore, Mexico, Malaysia, the Philippines and Chile. Japan, the world's second largest economy, has been pushing to forge bilateral free-trade agreements with more than 12 countries by the end of 2008.
