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TRADE, ECONOMY, AND INVESTMENT
Thailand welcomes EU decision to drop ‘yellow card’ warning overfishing practises
(9 January 2019) Thailand on 9 January 2019 welcomed the decision by the European Union to drop its ‘yellow card’ warning over its fishing practices. In 2015 Thailand was included in a list of countries as a warning over its unsustainable fishing practices, which carried the threat of a European ban on its exports. The EU Commission claimed that following the warning being issued, both Thailand and the Commission had been ‘engaged in a constructive process of cooperation and dialogue’ resulting in Thailand upgrading its fisheries governance in line with international standards. Among the reforms made included new vessels monitoring systems, satellite tracking of its fishing vessels, and tougher regulations with regards to human trafficking and ill-treatment of migrant workers in its fishing industry. Thai seafood exports rose to US$2.1 billion in 2017, recovering to its 2014 level after a drop to US$1.8 billion in 2015 following the EU warning. 9.9% of its seafood exports went to the EU in 2018, versus 10.3% in 2014.
EU threatens to end trade preferences for Cambodia and Myanmar, spurring different responses
(8 January 2019) EU threatens to end trade preferences for both Cambodia and Myanmar over their human rights issues has spurred both countries to respond in different ways. In October, the European Commission declared that it was ready to terminate an arrangement granting both countries tariff-free access to the EU, pointing to alleged human rights abuses in both countries. Cambodia has reportedly sought to ease political restrictions, with its parliament in December passing a law which would allow members of the banned opposition party Cambodia National Rescue Party (CNRP) to return to politics. The CNRP had been disbanded by the Supreme Court in 2017 on accusations of attempting to seize power with the help of the US. In Myanmar, threats of EU sanctions following its perceived mishandling of the Rohingya issue has pressured the country to ease restrictions to foreign direct investment. Officials have announced moves to open the insurance market to foreign capital, as well as forming an interagency body tasked with drawing foreign investment. Both Cambodia and Myanmar operate under the EU’s Everything But Arms scheme, which allows both nations to export all goods except arms to the EU duty-free.
Laotian authorities to continue documenting illegal foreign workers and providing them with work permits
(8 January 2019) Laotian authorities from different ministries and government bodies met on 7 January 2019 in Vientiane to discuss the draft of a labour regulation addressing the issue of foreign workers in Laos. The meeting was attended by the Ministers of Labor and Social Welfare and the Deputy Minister of Public Security. Over 42,000 foreign workers have registered in Laos, mainly from Vietnam, China, and Thailand. It was reported that the authorities will continue to register undocumented foreign workers and issue them with temporary work permits as had been done in 2018. Measures are also being taken to identify the number of illegal foreign workers in a bid to control undocumented migrant labour in the country.
Investment applications to Thailand top US$28 billion in 2018, exceeding official target
(9 January 2019) Thailand’s state investment agency on 9 January 2019 reported that Investment applications to Thailand reached a total of THB 902 billion (US$28.2 billion) worth of projects in 2018, 43% higher than in 2017 and beating the official target of THB 720 billion (US$22.53 billion). Thai and foreign governments submitted a total of 1,626 project applications in Thailand in 2018, with some THB680 billion (US$21.23 billion) focused on the Eastern Economic Corridor, a development corridor focused on high tech industries. The Board of Investment has set a target for THB750 billion (US$23.42 billion) worth of investment pledges for 2019, hoping to capitalize on companies shifting production out of China to Southeast Asia due to the ongoing trade war between the US and China.
Vietnamese exports to Cambodia jump above US$3 billion in 2018, setting new record high in last decade
(8 January 2019) Vietnamese exports to Cambodia jumped above US$3 billion in 2018, setting a new record high in the last decade and opening new opportunities for Vietnamese firms to capitalize on the Cambodian market. In the last three years, the value of Vietnamese exports to Cambodia increased from US$2.2 billion in 2016 to US$2.8 billion in 2017, and measured at US$3.4 billion in the first 11 months of 2018. During the January to November period last year, steel, petroleum, and garment textile exports accounted for 49.63% of total exports to Cambodia. In 2018, the Cambodian government introduced the Rectangular Strategy-Phase 4, which prioritizes the boosting economic development via increasing business activities with major partners and foreign direct investment, as well as boosting international trade. It is reported that this will benefit Vietnamese firms seeking to invest in Cambodia. It was reported that as of November 2018, Vietnam has 210 investment projects in Cambodia with combined registered capital exceeding US$3 billion.
About Greater Mekong Subregion (GMS)
The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.