The Trans-Pacific Partnership Agreement will benefit Asean, including Thailand, even though the Kingdom is not yet one of the free-trade pact's negotiation members, according to Baker and McKenzie partners.
Despite growing concern among some Thai economists that the TPP would put Thai businesses at a disadvantage in relation to neighbouring countries like Vietnam, which is one of the TPP's 12 planned members, Say Sujintaya - a partner in Baker & McKenzie's Bangkok office - told a seminar held by the law firm yesterday that the agreement should help Thailand, which has already missed the chance to form a bilateral free-trade agreement (FTA) with the United States, to find a channel for improved access to the US market.
"But we don't know why the Thai government isn't interested in the TPP ... whereas now there is no opportunity for us to seal an FTA with the US," she told The Nation on the sidelines of the seminar.
Say said the TPP should complement the Asean Economic Community (AEC), which Thailand and the nine other Asean members have signed up to.
"The TPP, which is a free-trade agreement, is even more realistic since it has a mechanism to enforce the change of laws and regulations in countries, while the AEC doesn't have such a mechanism," she said.
Veerathai Santiprabhob, the next governor of the Bank of Thailand, was quoted as saying recently that without a TPP deal Thailand could fall even further behind in the eyes of foreign investors, who would look at other countries such as Vietnam, which has many more free-trade pacts with other regions.
Supavud Saicheua, managing director of Phatra Securities, told a conference last week that investors could relocate more production out of Thailand following the conclusion of negotiations among TPP members, expected around the end of this month.
Fred Burke, managing partner at Baker & McKenzie (Vietnam), told yesterday's seminar - the "2015 Thailand Asean Client Forum" - that Vietnam was now giving more focus to the TPP than to the AEC pact.
Nevertheless, as in the case of Asean FTAs with China, which have helped Vietnam to become a major global production base for Samsung's mobile phones, he said combining the TPP with other agreements, including the AEC, would give a significant boost to the Asean economies as a whole.
"The benefits [of the TPP] outweigh the distractions [of Asean members from their AEC]. The TPP will help multiply the impact of the AEC," he argued.
Eugene Lim, co-head of Baker & McKenzie's Asia Pacific Trade & Commerce Practice Group, said that while China, which had become more expensive as a manufacturing base, might lose its share of foreign direct investment to Southeast Asia, the country looked set to benefit from its further engagement with Asean under its "1-Belt, 1- Road" initiative, under which it aimed to invest more in infrastructure projects in Asean and other countries.
Sorachon Boonsong, partner of Baker & McKenzie (Thailand), said there were opportunities for merger and acquisition deals in Asean, thanks to the grouping's economic growth, especially in "hot areas" such as healthcare, financial sectors, food and beverages, and infrastructure.
However, many challenges remain, particularly due to a lack of transparency in terms of information on Asean companies, he said.
Moreover, non-compliance and human rights have become "big issues" for completing an M&A transaction, since private equity investors normally will take a minority stake and therefore have no ability to change the behaviour of the targeted company, he added.