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(ACFTA): the Case Study of Thailand, ASEAN-China

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(ACFTA): the Case Study of Thailand, ASEAN-China ASEAN-CHINA ECONOMIC COOPERATION UNDER THE ASEAN-CHINA FREE TRADE AGREEMENT (ACFTA): THE CASE STUDY OF THAILAND BY MISS KANSINEE SOMJAI A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN INTERNATIONAL RELATIONS FACULTY OF POLITICAL SCIENCE THAMMASAT UNIVERSITY ACADEMIC YEAR 2016 COPYRIGHT OF THAMMASAT UNIVERSITY Ref. code: 25595403040131WTU ASEAN-CHINA ECONOMIC COOPERATION UNDER THE ASEAN-CHINA FREE TRADE AGREEMENT (ACFTA): THE CASE STUDY OF THAILAND BY MISS KANSINEE SOMJAI A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN INTERNATIONAL RELATIONS FACULTY OF POLITICAL SCIENCE THAMMASAT UNIVERSITY ACADEMIC YEAR 2016 COPYRIGHT OF THAMMASAT UNIVERSITY Ref. code: 25595403040131WTU THAMMASAT UNIVERSITY FACULTY OF POLITICAL SCIENCE THESIS BY MISS KANSINEE SOMJAI ENTITLED ASEAN-CHINA ECONOMIC COOPERATION UNDER THE ASEAN-CHINA FREE TRADE AGREEMENT (ACFTA): THE CASE STUDY OF THAI-LAND was approved as partial fulfillment of the requirements for the degree of Master of Arts in International Relations August 19, 2017 on ...................................... Chairman (Asst. Prof. M.L. Pinitbhand Paribatra, Ph.D.) Member and Advisor (Assoc. Prof. Attakrit Patchimnun, Ph.D.) Member (Asst. Prof. Pichit Ratchatapibhunphob, Ph.D.) Dean (Assoc. Prof. Supasawad Chardchawam, Ph.D.) (1) Thesis Title ASEAN-CHINA ECONOMIC COOPERATION UNDER THE ASEAN-CHINA FREE TRADE AGREEMENT: THE CASE STUDY OF THAILAND Author Miss Kansinee Somjai Degree Master of Arts Major Field/Faculty/University International Relations Faculty of Political Science Thammasat University Thesis Advisor Assoc. Prof. Attakrit Patchimnan, Ph.D. Academic Years 2016 ABSTRACT Since the Asian Financial Crisis in the year 1997, there has been increasing cooperation within the region. At the same time, a rising China has been spreading its influence to Southeast Asia, especially towards member countries of the Association of Southeast Asian Nations (ASEAN), in various aspects including political, economic and socio-cultural. Economic cooperation between ASEAN and China has rapidly developed since the year 2001, when a free trade area known as the ASEAN-China Free Trade Agreement (ACFTA) was established. After the full implementation of ACFTA in all ten ASEAN member countries in January 2010, the volume of trade has been growing rapidly compared to past levels. China has become a very important trade partner to ASEAN nations, and for example has replaced Japan to become the largest export partner of Thailand. This research explores the driving forces behind ACFTA, from its beginning in 2001 to the year 2015. In addition, the research informs elaboration on the key causes of China and Thailand’s economic cooperation under ACFTA and examines opportunities and challenges under this free trade agreement. Keywords: Regionalism, Free trade agreement, ASEAN, China, Thailand Ref. code: 25595403040131WTU (2) ACKNOWLEDGEMENTS Firstly, I would like take this opportunity to express my heartfelt gratitude to my mother for her continuous financial support and encouragement from the beginning of my application to the MIR Program. Next, I would like to express my sincere appreciation to Associate Professor Dr. Attakrit Patchimnan, for his kind acceptance of being my thesis advisor; Assistant Professor De. M.L.Pinitbhand Paribatra, chairman of the thesis committee, and Assistant Professor Dr. Pichit Ratchatapibhunphob, member of the thesis committee for their kind support. I also would like to further share my appreciation to Assistant Professor Dr. Attasit Pankaew for his useful guidance and Dr. Somphob Manarangsan for his insightful discussion and comments regarding my research. In addition, I would like to thank Mr. Ridronachai Warungkarasami for his continuous encouragement, Mr. Jeremy Wellard for his patience on proofreading, and all member staff of the MIR program, Thammasart University for their guidance and facilitation throughout the completion of my thesis. Lastly, I wish to thank myself for making the graduation of MIR program possible and happen. Miss Kansinee Somjai Ref. code: 25595403040131WTU (3) TABLE OF CONTENTS Page ABSTRACT (1) ACKNOWLEDGEMENTS (2) LIST OF TABLES (5) LIST OF FIGURES (6) LIST OF ABBREVIATIONS (7) CHAPTER 1 INTRODUCTION 1 1.1 The background of Thailand’s political economy 1 1.1.1 Politics 1 1.1.2 Economy 3 1.1.2.1 Asian Financial Crisis 5 1.2 The Background of China 6 1.3 The Background of Association of Southeast Asian Nations (ASEAN) 8 1.3.1 ASEAN-China Relations 13 1.4 Significant of the issue 16 1.5 Research Objectives 19 CHAPTER 2 REVIEW OF LITERATURE 20 2.1 China and its economic influence 20 2.2 ASEAN-China Economic Relations 21 2.3 The China – Thailand Relationship 27 2.3.1 Early Harvest Program 30 Ref. code: 25595403040131WTU (4) CHAPTER 3 RESEARCH METHODOLOGY 32 3.1 Research questions 32 3.2 Research hypothesis 32 3.3 Theoretical reviews 32 3.3.1 Neoliberalism 33 3.3.2 Regionalism 34 3.4 Scope 36 3.5 Qualitative Analysis 37 CHAPTER 4 RESULTS AND DISCUSSION 38 CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS 59 REFERENCES 63 APPENDICES APPENDIX A List of Prime Minister of Thailand 72 APPENDIX B List of President of China 75 APPENDIX C Early Harvest Program 76 BIOGRAPHY 91 Ref. code: 25595403040131WTU (5) LIST OF TABLES Tables Page 1.1 Timeline of ASEAN China Free Trade Agreement 16 4.1 Thailand’s Gross Domestic Product (GDP) and its annual growth 41 4.2 Thailand’s Import Value to Selected Trade Partners between 1995 -2015 47 4.3 Thailand’s Exports to Selected Trade Partners in 1995 -2015 49 4.4 Thailand’s Foreign Direct Investment 52 Ref. code: 25595403040131WTU (6) LIST OF FIGURES Figures Page 1.1 Thailand’s Gross Domestic Product (1995 -2015) 4 1.2 China's Gross Domestic Product (1960-2015) 7 1.3 Map of Southeast Asia and China 9 4.1 Thailand’s Import – Export Statistics, 1995-2015 42 4.2 Thailand’s trade with China during the years 1995-2015 44 Ref. code: 25595403040131WTU (7) LIST OF ABBREVIATIONS Symbols/Abbreviations Terms AFTA ASEAN Free Trade Agreement ACFTA ASEAN China Free Trade Agreement ASEAN Association of Southeast Asian Nations EHP Early Harvest Program FTA Free Trade Agreement GDP Gross Domestic Product IMF International Monetary Fund NESDB National Economic and Social Development Board PAD People's Alliance for Democracy UDD United Front of Democracy Against Dictatorship Ref. code: 25595403040131WTU 1 CHAPTER 1 INTRODUCTION This first chapter aims to introduce and provide background to the various actors related to this research. This chapter will provide background to Thailand’s political economy, discuss the importance of the regional economic incident known as the Asian Financial Crisis, provide background to China’s regional role and give an overview of the Association of Southeast Asian Nations (ASEAN). This chapter will also cover the significant of key issues, in order to elaborate on the importance of this research and its objectives. 1.1 Background to Thailand’s Political Economy Thailand is located on the mainland of Southeast Asia and covers an area of 514,000 square kilometers. Thailand’s borders connect to Myanmar, Laos, Cambodia and Malaysia and the Southern part of Thailand has its coastline on the Gulf of Thailand and the Andaman Sea. Thailand’s geography is categorized into four sub- regions: the northern region, the northeast region, the central region and the southern region. Historically, Thailand is the only country in Southeast Asia which has never been colonized by a Western power. Thailand’s Head of State is its King and its Head of Government is the Prime Minister. According to the World Bank (2016a), Thailand’s current population is over 67 million people. Overall, Thailand has good diplomatic relationship with the world’s most powerful countries, including both China and the United States. 1.1.1 Politics The Thai political system changed from an absolute monarchy to a constitutional monarchy in the year 1932. The first Thai Prime Minister was Phraya Manopakorn Nititada, who established the first official constitution on 10th December 1932. However, Phraya Manopakorn Nititada was deposed by Phraya Phahonphonphayuhasena in the first of many military coups in June 1933. He later became the second Thailand’s prime minister in 1933. Ref. code: 25595403040131WTU 2 From the beginning of the constitutional monarchy in 1932 until 2015, Thailand had 29 Prime Ministers. Thailand has had a total of nineteen charters and constitutions, which makes it one of the countries with the most constitutional changes in the world. Moreover, Thailand had a total of thirteen military coups between the first coup in 1933 and the year 2015, making it the country with the most coups d’état in the world. It has been said that the monarchy and the military both have important role to play in shaping Thai politics. Most Thai Prime Ministers were previously from the military, particularly those who had long terms in government, such as the 3rd prime minister, Plaek Phibunsongkhram, the 10th prime minister, Thanom Kittikachorn, and the 16th prime minister, Prem Tinsulanonda. In 2001, Thaksin Shinawatra was elected to be the 23rd Prime Minister of Thailand. He changed Thai traditional policies to more populist approaches, known as Thaksinomics. Thaksinomics were economic policies aimed at supporting rural people and the lower income populations which make up the majority of the Thai population. Examples of popular policy are the 30 Baht universal healthcare program, the One Tambon One Product (OTOP) program, and the four-year debt moratorium for farmers. Thaksin Shinawatra’s government developed Thailand’s security cooperation with the United States, while at the same time he also developed trade relations with China. In 2005, there was a huge public protest against Prime Minister Thaksin, named the People's Alliance for Democracy (PAD). It was the beginning of Thailand’s current political turmoil. The PAD was led by Chamlong Srimuang and Sondhi Limthongkul and the yellow shirt was used to represent supporters of the PAD.
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