A feasibility study on a Free Trade Agreement (FTA) between European Union and Thailand
Introduction
The most important aim of this research is to substantiating the following hypothesis: Is FTA between European Union and Thailand feasible? On the basis of diagnostic aspect, the key factor of this question would be discovered that FTA between two organizations will feasible under the following conditions:
- The marketplace between two organizations can be linked in a generally favourable way.
- The importation among the countries in this agreement is flexible and it could help a lot of countries to enlarge the competitiveness of the domestic produce and including exportation.
- FTA could contribute downstream manufacture behavior.
- There are significant trades supplementary.
- The merchandises are not awfully expensive since fairly export method and similarities in manufacture method, which support the ability for intra-industry negotiation.
- A domestic department is not disapprovingly affected in a significant way on description of importation rivalry.
- Agreements will not retraction in any delicate section among the countries which are memberships.
- FTA will not cause any major problem about taxation in the country.
Literature Review
Urata’s theory.
– FTA is a regular policy which can assist the country who is a membership in a lot of areas for instance, labor mobility, competition policy and intellectual property. – The countries that were not basically in geologically close can be connected by using the channel in Free Trade Agreements as a central point.
– FTA was respected by a lot of countries more than multilateral trade liberalization which is created by the World Trade Organization (WTO).
– Many countries were suggested to accept FTA due to the external factor for example, an approaching to the international marketplace and securing in trading.
– For internal factor, the domestic system would be modified by using and external force which is made by an agreement.
– FTA needed a less time to establish compare to multilateral trade which is created by Word Trade Organization.
– The marketplace could be enlarged by using FTA since the profitableness would not only be limited to the memberships in the agreements but also to non-memberships.
Christopher Dent’s theory
– FTA could change some memberships from mercantilism to liberalism throughout the trading plan.
– An agreement can be used as a tactical politics for example, in Asian economic crisis where East Asian countries decided to make two-sided agreements as a method in order to reinforce the relationships among the countries.
– Dent’s theory provides a connection between a politics and economics. It describes that the politico-diplomatic is a reasons of the beginning of Free Trade Agreement.
Baldwin’s theory
Compare the growth between the countries that using and non-using liberalization system. It could be found the country which is a participant of agreements could be grown higher than the other country.
Methodology
Interview
Sending some e-mails in order to interview, asking their opinions and request for more information to the following source:
- The officer in customs department who is in charge of FTA section.
- The professors in the law school and business school who is a specialist.
- The officer in United Nations Conference on Trade and Development (Thailand) for an importation and taxation data
- The representatives of political members in the European senate and quite a few European business associations. Their research also is provided as a variety of academic and non-academic journals.
Reports
The data could be collected from the government reports, historical reports, and the other official articles.
Books and Websites
Some information especially the theories which are related to FTA could be gathered from books such as (Clausing, 2001) (Martínez-Zarzoso and Nowak-Lehmann, 2003), book chapters (Baldwin and Taglioni, 2006), newspapers, academic journals (Rose and Van Wincoop, 2001) and also in highly trusted websites.
Case study
The hypothesis can be created by investigate some case studies. For example, Malaysia‘s Free Trade Agreement with European Union. Since it is an agreement between the country in ASEAN and Europe, it is easy for comparison and finding a possibility. Moreover, Thailand and Malaysia has a similarity of industry and manufacture such as the automotive and steel.
In order to figure out of an effect of FTA, it is necessary to focus separately on the importation and exportation. Then, combine the two results to criticize a truly affectation.
Expected Findings
- To find the way to improve the profit and flexible price of merchandises between Europe and Asia since Free Trade Agreement is a multilateral trading system, it could make a reliable product with the best quantity and quality.
- To find the possibility to expand Thailand’s economic relationships.
- To figure out an appropriate structure of the Free Trade Agreement.
- To describe the benefits between memberships in an agreement in a lot of areas such as politics, economics, diplomacy including rights and obligations of the contracting memberships.
- To figure out how to develop the relationships between two continents in many sections by using FTA. For example asset, technology, labor market.
- To find the way to expand and combine the economic system which can increase a large opportunity for labor market and decrease the living expenses for the people.
- To find the way to improve the competitiveness and capability under the economically conditions.
- To analyze and compare the advantages and disadvantages of the contracting memberships.
