US embassy cable - 05BANGKOK7033

C O N F I D E N T I A L SECTION 01 OF 07 BANGKOK 007033 
 
SIPDIS 
 
DEPARTMENT PASS FOR USTR -- BWEISEL, LCOEN 
DEPARTMENT PASS TO DEPT OF AGRICULTURE WASHDC 
 
E.O. 12958: DECL: 11/10/2015 
TAGS: ETRD, EINV, TH 
SUBJECT: U.S.-THAILAND FTA: GOOD PROSPECTS FOR PROGRESS IN 
NOVEMBER NEGOTIATING ROUND 
 
Classified By: Economic Counselor Michael J. Delaney, for Reasons 1.4 ( 
b) and (d) 
 
 
 
1. (C)  Summary:  On the eve of the Round 6 FTA talks in 
London, prospects look good for making solid progress in most 
negotiating areas scheduled for discussion.  There are signs 
that the mood here has shifted from passive resistance to a 
resigned, "let's get on with it" attitude.  Even in financial 
services, the RTG is publicly stating that liberalization is 
coming.  Many of the most knowledgeable observers here point 
out that the support of PM Thaksin has not flagged, and that 
his clout alone ensures that the FTA will be completed.  The 
personal involvement of PM Thaksin probably is a negative, 
however, in the area of temporary entry: RTG insistence on 
some treatment of this issue reportedly comes directly from 
the PM, who is mindful of the temporary entry provisions in 
Singapore's FTA with the U.S. 
 
2. (C)  The RTG is billing the FTA here in Thailand as not an 
FTA at all, but as an economic cooperation agreement with the 
U.S.  At the heart of this marketing strategy is a strong, 
more or less across the board trade capacity building effort 
as an integral part of the FTA process.  For that reason, a 
continuation of the strong U.S. effort in this area is a 
crucial ingredient for rapid FTA progress. 
 
3. (C)  Paras 10-35 provide our assessment of the state of 
play in many of the negotiating areas.   End Summary 
 
Things Look Mostly Good for Progress in London 
4.  (C)  Based on our talks with a broad range of Thais 
involved in one way or another with the FTA talks, we are 
hopeful that good progress can be made in most of the 
negotiating areas.  There is definitely a change in the mood 
here -- a shift from the old "I don't see how we can possibly 
meet the Americans' demands", to a "let's get on with it" 
attitude.  While the new mood is more akin to resignation 
than enthusiasm, it nevertheless represents an improvement 
that, we hope, will be felt in London. 
 
5.  (C)  There are several reasons for the mood shift here. 
The RTG's senior negotiator, Ambassador Nitya, told us that a 
certain amount of preliminary "dancing around" was necessary 
for the real talks to begin.  "The first four rounds were 
discussions, really, just a way of getting acquainted," he 
said.  (At this point, Nitya broke into a rendition of 
"Getting to Know You," appropriately, from the movie The King 
and I).  Now, Nitya said, real negotiations can begin.  Other 
developments that have contributed include Prime Minister 
Thaksin's September 19 meeting with the President, in which 
both affirmed the desire to finish talks by early 2006; and 
the completion of internal RTG sectoral studies that paint a 
generally benign picture of the likely effects of the FTA on 
the Thai economy.  Finally, in many negotiating areas, Thai 
officials have gotten the measure of their American 
counterparts and now possess the self-confidence to move 
forward. 
 
6. (C)  Most of our contacts believe that PM Thaksin's 
commitment to successfully concluding an FTA with the U.S. is 
genuine and has not flagged.  Said one of our sources, 
"Thaksin is loathed by the old-line, elite industrialists, 
who see him as a low-class upstart.  That is one reason 
Thaksin has no real problem opening up the markets via the 
FTA -- he has no desire to protect his enemies from 
competition."  And, given Thaksin's continued grip on power, 
most observers here are convinced that he has the clout to 
overcome opposition to the FTA.  According to one observer, 
"You guys (the USG) worry too much -- the FTA will be done 
because Thaksin said it would be done." 
 
"Cooperation", Not Free Trade 
7. (C)  Faced with the apathy of the masses and the hostility 
of a few elite groups (mostly protected sectors and 
foreign-funded NGOs), the RTG is portraying the FTA as not an 
FTA at all, but rather an economic cooperation agreement 
(formally, perhaps the U.S.-Thailand Trade and Investment 
Cooperation Agreement -- USTICA).  This largely explains the 
RTG's zeal for packing as many trade capacity building 
projects as possible into the FTA process.  Proponents of the 
theory of comparative advantage, or even believers in the 
"win-win" nature of open markets, are thin on the ground 
here, but many Thais readily recognize the advantages of 
cooperation with the U.S., particularly when that cooperation 
involves transfer of expertise from the U.S. to Thailand. 
8. (C)  The RTG's notion of the FTA being at heart a 
cooperation accord is linked to likely RTG market access 
offers.  Nowhere can this be seen more clearly than in 
financial services.  Perhaps the ultimate protectionist 
shibboleth in Thailand, recent signs point to a willingness 
to negotiate liberalization even in this area.  The RTG 
Finance Minister recently told us that dealing with financial 
services in the context of the FTA is a challenge for 
Thailand, in part because increased international regulation 
and rules governing banks (e.g., Basel II) are lessening 
commercial banks' ability to finance long term.  The RTG, he 
said, wants to build up Thai capital -- especially bond 
markets -- as vehicles to provide long term project finance. 
According to the Finance Minister, the biggest obstacle to 
further development of the Thai bond market is the lack of 
liquidity which leads  to high volatility.  Rules requiring 
mutual funds, pension funds, and other institutional 
investors to mark-to-market on a daily basis means that they 
are hesitant to invest in such volatile instruments.  The key 
to FTA progress in this area, he said, lies in USG technical 
assistance in assisting Thailand in developing its capital 
markets and effectively dealing with the mark-to-market 
issue.  The Thais are saying, in essence, "OK, you want us to 
liberalize in this area, then it is up to you to equip us to 
deal with the effects of this liberalization."  While 
financial services is a particularly vivid example of this 
link between FTA progress and USG technical assistance (under 
the broad rubric of trade capacity building), we believe this 
link exists in most negotiating areas. 
 
9. (C)  The other advice we consistently receive is to take a 
lesson out of Japan's successful FTA game book.  While less 
than comprehensive, the Japanese seem to have achieved many 
of their immediate goals in the FTA with Thailand.  This was 
accomplished by orchestrating a steady parade through Bangkok 
of MITI types and Japanese industrialists, extolling the 
employment and FDI benefits of a Japan-Thailand FTA.  The 
arguments we not at all abstract; they touted how X number of 
jobs and X amount of Japanese investment would come to 
Thailand if the event was completed.  Said one insider, "This 
sort of thing works here.  Nobody bothers to check on the 
accuracy of these claims post facto -- money and employment 
talks."  The problem with this idea is that we are unaware of 
any U.S. firm (or the AmCham) that is prepared to make such a 
statement in relation to the U.S.-Thailand FTA.  But we 
should remain alert to any emerging opportunities that may 
present themselves. 
 
Negotiating Areas 
10. (C)  The following is our assessment of the current state 
of play in the various FTA negotiating groups.  (NOTE:  Not 
all of these groups are scheduled to meet in London.) 
 
11. (C)  Financial Services -- The RTG seems to be connecting 
liberalization in this area to U.S. assistance in developing 
Thailand's capital markets (para 8).  With that proviso, 
there are encouraging signs that we may begin to see forward 
movement in London.  Finance Minister Thanong seems to be 
preparing the Thai public and financial community for a shift 
from the protectionist policies that have long dominated much 
of the financial sector.  His clearest statement that 
liberalization is coming (albeit after an indeterminate 
phase-in period) came in a November 8 speech before a group 
of Thai bankers in Bangkok.  Thanong urged Thailand's 
financial institutions to prepare for "unavoidable" 
liberalization.  He said, "In the age of financial sector 
liberalization, in order to be in harmony with the 
globalization, we cannot either reject or oppose such inflow 
of change.  On the contrary, we must prepare to become strong 
enough.  What I can do now is that I can only delay the 
timing of such a change, not allowing it (the liberalization 
in the financial sector) to happen before the adaptation of 
the country's financial institutions." 
 
12. (C) The RTG probably is willing to accept relatively 
short phase-in periods for insurance and non-banks (perhaps 
even immediate liberalization), but will hold out for a long 
phase-in period for banks.  As noted in para 8, the phase-in 
period is likely to be linked to the development of 
Thailand's capital markets.  A big concern is cross-border 
investments.  Most analysts here think that under current 
conditions, total liberalization would produce a one-way 
outflow of capital from Thailand.  The hope is to phase in 
cross border liberalization to progressively force capital 
market development. 
 
13. (C)  This fairly rosy scenario could be upset by the Bank 
of Thailand, still the strongest opponent of financial 
services liberalization.  We expect the BoT to fight banking 
liberalization right up to the signing of the FTA.  One 
insider told us that the BoT Governor opposes liberalization 
"because he is a Thai banker, not a central banker."  Another 
analyst with good ties told us the BoT is planning to team up 
with some commercial banks and NGOs to generate large 
demonstrations against the FTA ("with the focus on medicine 
prices, GMOs, and other fear mongering issues -- the BoT 
realizes people won't demonstrate for banks").  Still, we 
understand the BoT has presented a proposed timetable for 
liberalized market access to RTG policymakers. 
 
14. (C)  Another complication in financial services is the 
jettisoning of the issue by Amb. Nitya.  The RTG senior FTA 
negotiator has surrendered responsibility in this area to the 
Ministry of Finance.  This reportedly has created logistical 
and coordination problems within the RTG.  We understand Amb. 
Nitya was scheduled to meet with Finance officials (as well 
as former Finance Minister Somkid) on November 9 for the 
purpose of resolving these problems. 
 
15. (C)  Services -- This group is not scheduled to meet in 
London.  Our contacts report that progress in future rounds 
is likely to be halting.  Hindrances are legion.  First, 
services is a highly protected sector in Thailand, with many 
SMEs that are thought to be incapable of surviving greater 
competition.  Second, Thailand has not opened up this sector 
in previous FTAs, giving rise to the expectation that the 
area will again be excluded.  Third, the Thais are almost 
entirely on the defensive in this area, with the only 
offensive issue being visas.  Fourth, the lead Thai 
negotiators, especially Khun Nan, are unenthusiastic about a 
bilateral approach (Nan was formerly posted at the WTO, and 
is reportedly imbued with "the spirit of G-77").  Finally, 
the Thai services negotiators are also responsible for 
conducting trade agreements with India, Australian FTA 
implementation issues, and APEC/ASEAN, so they have limited 
to devote to the FTA with the U.S. 
 
16. (C)  While no panacea, we think continuing USG offers to 
provide trade capacity building support for services SMEs 
would be helpful, as would technical assistance on standards 
and certification. 
 
17. (C)  Telecommunications -- Chirapa Chitraswang, Principal 
Advisor for Communications, MICT, Direk Chareonpol (MICT), 
and Pasu Srihirun from the National Telecommunications 
Commission (NTC) will attend the London talks.  We are not 
aware of any deal-breaker issues that will be highlighted in 
this round.  The MICT has, nevertheless, been reluctant to 
discuss and un-bracket the US text to date, because officials 
there have been waiting for the NTC to issue licenses and 
regulatory guidance.  The NTC has been operational for only 
one year.  When the Ambassador met with the Minister of 
Information and Communication Technology in October, he urged 
the MICT to take the lead in the interagency process on the 
Thai side. While we expect that the regulatory picture will 
be sufficiently clear for the MICT to issue policy guidelines 
by the anticipated January FTA round, we do not know the 
extent to which they are able to commit during the 
intersessional round. Additionally, we understand that 
another reason for RTG delay is that some telecom issues tie 
in with other chapters, such as IPR (on satellite signals, 
for example).  The Thai telecom sector has experienced 
considerable upheaval the past year (see recent Embassy 
reporting), including the Telenor buyout of UCOM and TAC, the 
NTC,s issuance of licenses, and the prospects for the 
privatization of state-owned telcos TOT and CAT Telecom. 
 
18. (C)  E-Commerce -- Ms. Anchalapon Siriwan, Director of 
the Strategy and Planning Bureau (Acting Senior Advisor on 
Foreign Affairs), MICT, has replaced Dr. Duangtip as the 
chief negotiator for the RTG.  Direk Chareonpol (MICT) and 
Pasu Srihirun (NTC) will also attend the London round.  As 
with telecommunications, we are not aware of any deal-breaker 
issues, but the MICT has been reluctant to discuss and 
unbracket the US text thus far.  We do not have a clear 
understanding of what the new chief negotiator is prepared to 
do at the London talks. 
 
19. (C)  The one issue discussed among USTR, State, and the 
MICT since the June Montana FTA round is the matter of 
Lese-Majeste.  The RTG has proposed to include language in 
the FTA to the effect that the e-commerce provisions not be 
read as a license to insult the king.  USTR has proposed in 
return that the matter be dealt with in a confirmation of 
policy letter. State,s lawyers have reviewed the draft 
letter prepared by USTR and find it acceptable.  US 
negotiators should be aware, however, that the language 
proposed by the RTG also mentions &indecent or harmful 
content,8 and that the government of Prime Minister Thaksin 
Shinawatra -- with the MICT as the lead agency -- is 
currently engaged in a campaign (known as Cyber Clean) to 
make cyberspace free from &inappropriate content.8  The 
MICT has specified that the target is pornographic content, 
not political material.  In this context, the MICT may oppose 
the side letter proposal. 
 
20. (C)  Labor  -- Three RTG negotiations ) Deputy PermSec 
Surin Chiravisit, Deputy DG Dr. Chaiyuth, and a staffer, Ms. 
Angkana.  We understand they will be prepared to discuss 
removing text brackets.  Among the topics proposed by DOL for 
discussion are:  treatment of subcontract labor under Thai 
labor laws, treatment of migrant labor, the pending Labor 
Relations Act, and Thailand,s proposed Special Economic 
Zones (SEZs) and the applicability of labor laws in the SEZs. 
 
 
21. (C)  Textiles -- This area will not be meeting in London. 
 The Thai side (K. Nantawan of Foreign Trade) says it has 
sent USTR a rules of origin proposal.  They expect to discuss 
possibly at a future separate inter-session, or at the next 
FTA round in Thailand. 
 
22. (C)  Customs -- Director Wattana U-Thasoonthorn of the 
Customs Standards and Valuation Directorate will attend. 
Subject matter will include recent follow-up questions that 
USTR sent to him after receiving the questionnaire answers 
from Thai customs.  Issues will include the advance 
publication of regulations, release of goods, review and 
appeal, carrier medium and express shipment.  We are hopeful 
that the Thai side is prepared to discuss text. 
 
23. (C)  Based on our discussions with Wattana, we believe 
the RTG is prepared to agree to 99 percent of the U.S. text. 
According to Wattana, the U.S. text, in general, describes 
standard Thai practice.  As in other chapters, however, the 
RTG is reluctant to agree to anything requiring a change in 
existing Thai law. Also, the RTG negotiators appear to be 
attempting to harmonize foreign commitments around WTO 
standards. 
 
24. (C)  Specific areas of RTG concern are as follows: 
 
-- Article 1 (Publication):  The RTG is prepared to comply 
with this item at this time so long as publication means in 
the Thai language.  The RTG is not prepared to publish 
English translations of all documents.  Additionally, in some 
cases, advance publication is difficult, although he said in 
the case of hearings the RTG does provide texts to interested 
parties in order to obtain comments.  (Note:  When the RTG 
holds hearings on pending legislation, both the process and 
the role of the hearings are less formalized ) and therefore 
transparent ) than the US negotiators may assume.  They tend 
to be brief affairs with far less substantive comment than is 
standard practice in the United States). 
 
-- Article 2 (Release of Goods):  This was the subject of 
detailed discussion in Honolulu in September.  Wattana 
expects that in London there will be a presentation by USTR 
on surety matters, and that the two sides will then review 
the text.  While Wattana expressed a willingness to structure 
the discussion in article by article fashion from the text of 
the US proposal, he objected to structuring the discussion 
around the points on USTR,s questionnaire.  Wattana 
explained that Thailand has expedited processing for gold 
card privilege holders and licensed customs brokers.  (Note: 
It appears that lack of knowledge of each others' systems 
continues to bedevil this issue.  The RTG system is a much 
more informal one than the US.  RTG negotiators do not appear 
to understand that Article 2 calls for release of goods 
within 48 hours across the board. The Thais need to grasp the 
comprehensive nature of this article, and in order to agree 
to it, there may need to be either TCB measures or a phase-in 
period, or both.) 
 
-- Article 7 (Express Shipments):  The RTG has difficulty 
accepting paragraphs (e) and (f) which specify that such 
shipments shall not be limited by maximum weight or customs 
value, and that the de minimus customs value shall be no less 
than US$200.  Wattana claims that these provisions were not 
in the FTAs with Chile, Australia, Singapore, CAFTA. 
Accepting the US$200 limit will require a change in Thai law 
(the Tariff Act) and will be a problem when the agreement 
goes to cabinet.  Current Thai law specifies about US$25 
(1,000 Baht). 
 
-- Article 10 (Advance Rulings):  Wattana understands that 
the U.S. FTA with Chile specifies a 3-year phase-in period. 
In principle, the RTG can implement this article at the 
present time, according to Wattana. 
 
25. (C)  Environment -- Mr. Petipong Pungbun Na Ayudhya, 
Permanent Secretary of the Ministry of Natural Resources and 
Environment (MoNRE) is nominally the lead negotiator for the 
Environmental Chapter.  After the conclusion of the last 
round of talks in Hawaii in September, Petipong assigned Dr. 
Supat Wangwongwatana (Deputy-Director General of MoNRE,s 
Pollution Control Department) to be the new lead for the Thai 
Environmental Group in London.  Dr. Supat speaks English 
fluently and reportedly has had a close relationship with the 
U.S. EPA for many years.  In a phone conversation November 8, 
however, Dr. Supat seemed uncomfortable discussing his role. 
He said that Mr. Songsak Saicheva, Minister Counselor at the 
Thai Embassy in Washington, has effectively been taking the 
leading role so far.  Dr. Supat admitted that he has not yet 
seen the text of the bracketed environmental chapter and 
asked if Econoff he could provide a copy.  In response to a 
request, Dr. Supat said he is on TDY outside of Bangkok and 
so would be unavailable to meet Econoff before the London 
talks.  Later the same day, a MoNRE staff member called ECON 
FSN to recommend that for discussions about the FTA, Embassy 
should go through &appropriate channels8 ) and talk with 
the Ministry of Foreign Affairs.  We attribute any reticence 
on the part of MoNRE to a lack of self-confidence. 
Thailand,s other FTAs have not included an environmental 
chapter.  MoNRE is not used to dealing with foreigners in 
formal negotiations. This is new ground for them, so their 
frequent personnel changes and hesitation in moving forward 
comes as no surprise. 
 
26. (C)  We did subsequently talk to the Ministry of Foreign 
Affairs.  Mr. Sorasak Samornkraisorakit, First Secretary and 
member of the Task Force on Environment for the FTA told us 
that the only item on the Thai agenda for the Environmental 
Chapter for next round of talks in London is to &discuss the 
text of the environmental chapter.8  We observe, however, 
that in addition to discussions on the text, in previous 
discussions the Thais were very interested to talk about a 
mechanism for environmental cooperative activities. 
 
27. (C)  The main sticking point on the text negotiations 
will be the Thai reluctance to agree to the wording of 
Article 2 ) &A Party shall not fail to effectively enforce 
its environmental laws(8  We believe the Thais are 
uncomfortable with this language because they feel they have 
a lack of capacity to effectively enforce their own 
environmental laws.  In a nutshell, the Thais lack manpower, 
training, and financial resources, and in addition, available 
legal penalties are often insufficient to deter violations. 
Following are examples from three environmental areas 
(policing national parks, controlling factory waste-water 
discharge, and conducting environmental impact assessments) 
that demonstrate the point. 
 
28.  (C)  Example #1:  Approximately ten percent of Thailand 
National Parks, full-time employees work directly for the 
Ministry of Natural Resources and Environment (although this 
figure varies greatly from Park to Park).  The Ministry does 
not have the financial resources to hire more employees 
directly.  The result is that most park rangers are local 
hires who are paid subsistence wages and are trained on the 
job (in patrolling, the use of a weapon, and the basics of 
identifying plant and animal species).  MoNRE has never 
developed a training curriculum for its locally hired park 
rangers, so the quality of training is very much dependent on 
the local park director.  Moreover, legal penalties for 
poaching and for illegal smuggling of plant and animal 
products in Thailand is low ) a maximum of USD 1000 fine and 
one year in prison.  (In practice, although arrests are made 
regularly, no one has ever gone to prison in Thailand for a 
plant or wildlife trafficking crime, and fines imposed are 
usually far less than the USD 1000 maximum.) 
 
29. (C)  Example #2:  At the launch of the Asian 
Environmental Compliance and Enforcement Network (AECEN) in 
Manila in August, the Thai delegation openly voiced his 
concern that Thailand lacked the necessary numbers of 
inspectors to ensure compliance with industrial wastewater 
laws and regulations.  In discussions, he expressed interest 
in other countries, experiences with industry associations 
that had established mechanisms for self-compliance and 
self-enforcement as a means to ease the burden on 
over-strapped government regulatory agencies. He noted that 
Thailand has an intricate structure of administrative and 
criminal procedures and penalties for compliance and 
enforcement, but at the end of the day, penalties are too low 
to serve as an effective deterrent.  The maximum penalty the 
courts can impose on a factory that fails to comply with 
waste discharge regulations is USD 5000. 
 
30. (C)  By law, MoNRE,s Office of Natural Resources and 
Environment Policy and Planning (ONEP) is responsible to 
administer the Economic Impact Assessment (EIA) process. 
EIAs are required for any type of construction project 
(including hotels, highways or roads, mining, multi-family 
dwellings, hospitals, factories, dams, irrigation works, 
etc.) in areas adjacent to rivers, lakes, or beaches or in 
the vicinity on National Parks, as well as any industrial 
project associated with petrochemicals, oil refineries, 
natural gas, iron, steel, and cement.  ONEP lacks the 
manpower to perform all these EIAs itself, so it contracts 
the performance of the EIAs to qualified consulting firms, 
which are licensed by ONEP (for a period of three to five 
years).  ONEP lacks the financial resources to pay the 
consulting firms, however, and in practice the firms who 
conduct the EIAs are paid directly by the business that is 
proposing to undertake the project.  This practice, of 
course, leads to serious questions about the integrity of the 
EIA process. 
 
31. (C)  Given this situation, we think the Thais may be 
receptive to potential cooperative environmental activities 
contemplated under an MOU on Environmental Cooperation that 
may help address the areas ) manpower, training, financial 
resources, and weak penalties - where they are lacking 
capacity. 
 
32.  (C)  IPR -- MFA ostensibly decided against sending a 
team to discuss IPR at the London round after learning that 
the USG would only have negotiators on hand to discuss 
enforcement, i.e., no experts were available to discuss 
Geographical Indications and Traditional Knowledge.  The RTG 
team was to be headed by DG Kanissorn Navanugraha. 
 
33.  (C)  The last round in Hawaii made substantially more 
progress than previous rounds where very little actual 
negotiation had taken place.  In Hawaii, RTG negotiators 
agreed in principle to much of USTR,s proposed text on 
copyright, trademark and enforcement.  However, Geographical 
Indications (GI) and Traditional Knowledge (TK) remain 
controversial issues.  The RTG is concerned about GI 
protection for Thai jasmine rice and Thai silk.  On TK, they 
are looking for provisions to ensure benefit sharing and 
disclosure of the source of genetic resources and traditional 
knowledge in production of goods. 
 
34. (C)  Neither side has yet tabled text on patents which 
promises to be controversial.  RTG negotiators have a 
different interpretation on TRIPS rules on patent protection 
and data exclusivity for pharmaceutical products. 
 
35. (C)  Similar to other chapters, RTG negotiators were 
unwilling to consider language in the IPR chapter that would 
require changes to Thai law, even changes consistent with 
legislation currently under review by the Thai Parliament. 
TEMPORARY ENTRY 
36. (C)  Although not a chapter in the FTA, we believe this 
remains the one "offensive" broad issue for Thailand.  We 
have not heard anything on the subject of immigration since 
the Embassy briefed the Ministry of Commerce Department of 
Trade Negotiations in August on US immigration law.  The 
Foreign Ministry said that it likewise desired a briefing, 
but has not followed up.  Under the AER Thailand enjoys 
certain privileges that Singapore did not when it was 
negotiating an FTA, specifically, the opportunity for Thai 
nationals to apply for treaty trader/treaty investor visas 
(so-called E visas).  So long as the business in the United 
States is Thai-owned, this visa category can largely 
accommodate applications of specialty workers (Thai chefs and 
spa attendants, for example) who wish to go work in the 
United States. 
 
37. (C)  Current law does not, obviously, address any RTG 
request with respect to H1B visas.  We believe much of the 
Thai insistence on some treatment of H1B visas within the FTA 
derives from the fact that Singapore won such treatment in 
its FTA with the U.S.  Prime Minister Thaksin is especially 
sensitive to any sign that the U.S. is prepared to offer 
Singapore something that is not being offered to Thailand. 
The personal views of the PM on this issue make it unlikely 
that the RTG will drop its temporary entry requests anytime 
soon.  We guess that the RTG plans to keep this on the table 
right up to the conclusion of the talks, and only remove it 
in exchange for some major U.S. concession (probably a 
removal of a significant U.S. request to Thailand.)  It is a 
safe bet that the issue will arise in some fashion during the 
London talks.  In a small but hopeful sign that our efforts 
to deflect this issue may be having some effect, the Ministry 
of Foreign Affairs has asked to meet with us on December 1 to 
gain greater understanding of the current visa regime and how 
Thailand can make better use of existing treaty trader 
privileges. 
 
 
 
 
 
 
 
 
 
 
 
BOYCE