Ask Kantathi Suphamongkhon what he thinks of Hungary and he gives a glowing review on the advances he has seen since visiting the country as a student. The Thai trade representative and advisor to the country’s prime minister views Hungary like many Europe’s other countries do — as a gateway to the Balkans. But his gateway also leads into the Baltic States, the Commonwealth of Independent States and the EU. While there are no plans to lobby Europe through Hungary, he admits “It is always good for us to have friends like Hungary to understand our situation.”

Thailand isn’t solely interested in Hungary for its location. It is hoping to deepen bilateral relations and cultural ties. In fact, listening to Suphamongkhon’s enthusiasm might make Hungarians feel a little flattered — but one look at his travel itinerary, which also includes Slovenia and Norway, reveals Hungary as part of a larger strategy.

KANTATHI SUPHAMONGKHON, the Thai Trade Representative is pushing for bilateral trade deals.

Suphamongkhon says it was in 1992 when Thailand realised the WTO was “going on the slow side.” They watched as the European Union energetically consolidated and as the North American Free Trade Agreement (NAFTA) became a substantial force. The Thai response, through an Asian trade block called ASEAN created the ASEAN Free Trade Agreement (AFTA). But AFTA has yet to become the regional force it aspires to be, partly because some countries within the 10-member group have yet to stick to commitments outlined in the agreement itself.

Beginning in 2010, ASEAN has set starting dates for regional free trade agreements with China, India and Japan — while the rest of the world hurries ahead with their own agreements. So while waiting for the WTO and AFTA to produce results, Thailand has joined the global race.

“We feel that we need to work on the Free Trade Agreements at the same time as our work with the WTO,” Suphamongkhon says. ”Most countries are trying to find partners for bilateral FTAs. Those who are not doing FTAs will experience substantial loss.”

Making a deal

Thailand has just completed signing its first trade agreement with Australia, which comes into effect in 2005. As part of the agreement, Thailand will eliminate around 50 percent of its tariffs on imports and Australia will reciprocate by eliminating around 83 percent of theirs. The deal promises to bring billions of euros into both country’s economies over the next two decades.

Thailand is also looking for agreements in places some might not expect. It hopes to wrap up negotiations with Peru by November this year, seeing it as a gateway into South America. So far the countries have agreed to tariff cuts on at least 3,000 products.

Thailand has also been courting Bahrain, New Zealand and the Europe Free Trade Association (EFTA). There are also what Suphamongkhon refers to as “early harvest” agreements with China and Japan, acting like sidebars before larger ASEAN deals come into fruition. An effect of such multiple deals gives Thai companies the chance to “get used to FTAs at a bilateral level,” Suphamongkhon says. “Allowing them to be a bit more competitive and ready for the world.” He likens the process to learning how to swim, starting off in a small pool and gradually moving into the river before finally taking on the ocean.

The race for competitiveness

Analysts worry, however, that these agreements will undermine the multi-lateral free trade process. But Suphamongkhon points out that Thailand strives for uniformity in its agreements and consistency with WTO guidelines, and the current situation is unavoidable.

”If no one in the world was doing FTAs and everyone was focusing their energy on the WTO then that would be fine,” he says. “But when countries begin to work on FTAs, those who are not will lose market access, become less competitive, and will be less able to attract foreign direct investment.”

For now, Thailand is focused on urging its industry to swim in smaller pools, focusing its trade policies on specific geographic areas. That way, when the time comes to compete with giants like Europe and the United States, they will be better prepared for the oceans ahead.