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According
to information provided by the US Embassy in Bangkok and the US State
Department web site, the following is the current status of the US–Thai
Treaty of Amity and Economic Relations: |
TREATY
OF AMITY: |
The
U.S.-Thai Treaty of Amity and Economic Relations (AER) was originally
signed in 1833. The 1966 reiteration of the Treaty allows U.S. citizens
and businesses incorporated in the U.S., or in Thailand that are majority-owned
by U.S. citizens, to engage in business on the same basis as Thais, exempting
them from most of the restrictions on foreign investment imposed by the
Alien Business Law of 1972 and its successor, the Alien Business Act of
1999. Under the Treaty, Thailand restricts American investment only in
the fields of communications, transport, fiduciary functions, banking
involving depository functions, the exploitation of land or other natural
resources, and domestic trade in agricultural products. Notwithstanding
their treaty rights, many Americans choose to form joint ventures with
Thai partners, allowing them to hold the majority stake because of their
familiarity with the Thai economy and local regulations. |
In
the Uruguay Round trade negotiations, all parties agreed that the privileges
provided by the Treaty of Amity to U.S. investors in the service sector
would be exempted from “Most Favored Nation” (MFN) requirements
for ten years, beginning with the establishment of the World Trade Organization
in January 1995. During this ten-year period, Thailand was expected to
liberalize its investment regime to provide roughly equivalent treatment
to all foreign investors in the service sector. This has not yet been
the case. Both the U.S. and Thailand anticipate that the rights
granted investors under the AER will be replicated in the bilateral FTA
currently under negotiation. |
In
October 2002, a Ministry of Commerce regulation stipulated that all foreign
investors would be subject to a minimum investment threshold when making
new investments in Thailand. In response to concerns expressed by the
Embassy and the American business community that this regulation was not
consistent with the national treatment provision of the AER, the RTG Ministry
of Commerce has proposed a draft regulation that would exempt AER investment
domiciled outside Thailand from the minimum investment requirement through
December 31, 2004, when the MFN exemption is set to expire. As of July
2003, the draft regulation is still being considered by the Council of
State and has not yet been adopted. For AER investment domiciled in Thailand,
the RTG has indicated that it would amend the Alien Business Law." |
| See more from the report by U.S. Department of State, Bureau of Economic Affairs: |
| 2005
INVESTMENT CLIMATE STATEMENT -- THAILAND: http://www.state.gov/e/eb/ifd/2005/42188.htm |
|
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