Thai exports to Australia increased 32 per cent on year in the first half this year, to Bt74.36 billion. During the same period, Australian exports to Thailand decreased 5.85 per cent to Bt66.5 billion.

"We believe that the FTA delivers a win-win outcome for both partners," Paterson said.

Last year, Australia had a trade surplus with Thailand, thanks largely to Thailand's high demand for Australian gold and crude oil. But tariffs on those two products have not been affected by the FTA, because both were already at zero.

He said that last year, Thailand imported 150 tonnes of gold from Australia to become the world's third-largest user per capita, after China and India.

Paterson said the agreement encouraged greater Australian investment in Thailand. In the first half of this year, the Thailand Board of Investment issued 10 certificates worth Bt871 million to Australian companies.

Among the Australian companies expanding into Thailand are Siam Ocean World, BlueScope Steel, the IAG Insurance Group and Macquarie Bank.

"We can expect Australian interest in Thailand to continue. Certainly, we know that companies are looking around for appropriate economic fundamentals, low-cost labour, a skilled workforce and big domestic markets. Australia has a long love of Thailand," he said.

Asked what advice he would give to the Thai government in its negotiations for an FTA with the US, Paterson said the Thai-Australian agreement benefited both parties because it was well crafted. "However, each country has its own situation," he said.

The ambassador said that some trade obstacles remained between Thailand and Australia, such as complicated tax procedures. For instance, the excise tax on imported wine is as high as 400 per cent, even though wine has an alcohol content of only 12 per cent on average. In comparison, excise tax on Thai liquor, which has a high alcohol content of 45 per cent, is "next to nothing".

"The tax is disproportionate," he said. "There should be equalisation in that area."

As the Thai government is in the process of reviewing the Alien Business Act, which reserves a number of activities exclusively for Thai businessmen, Paterson said Bangkok should be looking at structures that attract foreign investment. He said the government should liberalise the professions, such as architecture and engineering, opening them up to foreigners.

Jeerawat Na Thalang

The Nation