TCC strongly backs amendments to FBA

TCC strongly backs amendments to FBA

The Thai Chamber of Commerce (TCC) yesterday voiced strong support for the draft amendments to the Foreign Business Act (FBA), saying they would create a better trade and investment atmosphere by maintaining fair regulations for both local and foreign investors.

The TCC, a key agency in drafting the act, said the draft act would affect only 10 per cent of all businesses in Thailand.

The amended FBA should facilitate foreign investors in the long run through its clearer regulations. In particular, foreign investors will have a better understanding of which businesses they will be allowed to hold a 100-per-cent stake in and which are forbidden, said TCC chairman Pramon Sutivong.

The chamber held a press conference yesterday to support the government's decision to approve the amended FBA early this year.

Pramon, who is also chairman of the National Legislative Assembly (NLA) committee amending the act, explained that 70 per cent of all businesses in Thailand would remain unaffected by the amendments, because these firms had been operating under World Trade Organisation (WTO) obligations, as well as regional and other free-trade agreements. In addition, many manufacturing companies have been granted waivers, because they have received approval for Board of Investment privileges.

He pointed out that a TCC study showed only 10 per cent of all companies in Thailand would be affected by the amended law in paragraph 21 of Annex 3, which focuses on telecommunications services and retail businesses.

"Thailand would be affected by opening the market for those two sectors, because local operators cannot compete with multinational companies," he said.

In response to the Joint Foreign Chambers of Commerce's concerns about the amended Act, Pramon said it was possible for the government to revise some of its details.

"In my opinion, this amended Act is clear enough and fair to all involved. However, since some foreign investors are concerned about the unclearness of business types in Annex 3, the government has a right to reconsider additional amendments," he said.

However, Pramon did not clarify which businesses should be withdrawn from Annex 3 in order to allow more foreign investors to invest in the Kingdom.

Pramon said the measures should not create any obstacles to foreign investment, only to short-term sentiment.

The government does not intend to prohibit any foreign investors, but rather only wants to create a better business environment and fair conditions for both domestic and foreign investors, he said.

Meanwhile, the Joint Chambers also urged the government to accelerate approval and implementation of the Retail Business Act by the government.

TCC deputy secretary-general Jit Siratranont said implementation of the act would protect traditional Thai retail shops from being pushed out by giant retail operators.

"The interim government's tenure is too short to push towards implementation of the Act. It would take more than a year to see the Retail Business Act implemented to help small retail operators survive," he said.

The Commerce Ministry completed an amended draft Act last year, which the ministry has yet to submit for Cabinet approval.

The legislation was drafted in 2002 but never passed, because it failed to receive the approval of the Thaksin government.

Jit said the new government would introduce the Retail Business Act to control long-term expansion by the giant retailers.

He pointed out that four giant retail companies now had control of more than 50 per cent of the retail industry and said their market share would increase gradually unless the retail Business Act were enforced.

Moreover, Jit said the NLA committee should also consider restricting retail enterprises from operating additional businesses, in order to ensure fair practices for local enterprises.

For instance, retailers should be restricted from collecting entrance fees or brochure-printing fees from suppliers.

To attract more customers, the giant retailers have slashed the prices of their goods and collected entrance fees from suppliers, strategies that hurt local suppliers while decreasing the Kingdom's tax revenues, said Jit.

Petchanet Pratruangkrai

Headlines News
The Nation Thailand
Saturday January 20, 2007