Private-sector associations yesterday urged the government to set up a fund to support exporters once the market for non-agricultural goods further opens under the next World Trade Organisation (WTO) agreement.

The government and the private sector should set up the fund to focus on co-investment, the groups said. They said the fund should function independently, with 60 per cent of its money coming from the private sector and the rest from the government.

The fund would help manufacturers of industrial goods enhance their competitiveness after tariff and non-tariff barriers are eliminated when the WTO's Doha round of talks wraps up. The talks are expected to be completed by the middle of next year.

The proposal was made at a seminar on market access held yesterday by the Commerce Ministry's Trade Negotiations Department.

Representatives from the private sector said Thailand should have the fund to support their businesses. They also called for the creation of a safety net to ensure the survival of their businesses.

Virachai Vongbunsin, chairman of the monitoring subcommittee on trade rules at the Thai Chamber of Commerce, said the fund would help small industrial firms compete in the global market.

The fund proposal may be raised at a joint meeting of the Thai Chamber of Commerce, Federation of Thai Industries and Thai Bankers' Association this year before the end of the Doha round talks.

The WTO is trying to develop a formula for reducing agricultural and industrial tariffs before the middle of next year. If an agreement is reached, all members will have to further open their markets to both agricultural and non-agricultural goods.

Virachai said that in some sectors Thai industries were less competitive than their foreign rivals. "We should have measures to ensure that those businesses survive," he said.

Because a freer flow of goods and services is inevitable businesses must become more competitive, he said.

Aat Pisanwanich, director of the Centre for International Trade Study, said the efficiency of Thai industrial manufacturers was increasing at a slower rate than in other nations.

The low level of competitiveness here was the result of a lack of cooperation between firms, Aat said.

The centre found that sectors where development was slowing include major export sectors such as electric appliances, textiles, fisheries, jewellery, rubber, footwear and leather. The main rivals for Thailand's industrial manufacturers are in China and Vietnam.

The efficiency of local industrial manufacturers has been falling because they rely too much on imported raw materials and lack innovative production, Aat said.

The government has to move quickly to help private firms revamp so they can compete with foreign rivals, he said.

Sayan Chanvipaswongse, managing director of Excellent Business Corporation International, said private enterprise should constantly monitor the government's trade negotiations.

Private companies have to adjust to changing measures and regulations, he said.

"We should try to make the most of new rules that come out of the negotiations," he said.

Private sector groups also called on trade negotiators to find a way out of the major impasse in the Doha Round.

As the agreement may not be achieved by year-end, Thailand has time to prepare for the new rules, Sayan said, adding that if Thailand failed to do so it could lose its competitive advantages.

Petchanet Pratruangkrai

 The Nation