VZCZCXRO5049
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #0707/01 0790456
ZNR UUUUU ZZH
O 200456Z MAR 09
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6463
INFO RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEHCHI/AMCONSUL CHIANG MAI IMMEDIATE 6338

UNCLAS SECTION 01 OF 02 BANGKOK 000707 
 
STATE FOR EAP/MLS, EEB 
STATE PASS TO USTR FOR WEISEL AND BISBEE 
TREASURY FOR SCHUN AND MNUGENT 
COMMERCE FOR EAP/MAC/OKSA 
SINGAPORE FOR FINATT BAKER 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:N/A 
TAGS: ECON EAGR ETRD PREL KIPR TH
SUBJECT: PRIME MINISTER ABHISIT ENGAGES WITH AMERICAN BUSINESS 
 
BANGKOK 00000707  001.2 OF 002 
 
 
¶1. (SBU) SUMMARY:  Prime Minister Abhisit Vejjajiva assured a U.S. 
ASEAN Business Council (USABC) delegation on March 4 that his 
administration would continue to be "pro-business," even in these 
difficult economic times.  Abhisit also announced the creation of a 
"one-start shop" within the Prime Minister's office to answer 
business concerns and coordinate the resolutions among the various 
ministries.  As part of an ASEAN regional outreach mission, 37 
American business representatives met with ten government ministers, 
in addition to the Prime Minister himself, during their visit to 
Bangkok, March 2-4.  The delegation also met with Ambassador John 
and said how pleased they were with the engagement and 
responsiveness of Abhisit's new government on business issues.  This 
year's delegation consisted of U.S. companies: Abbott, AIG, APCO, 
Caterpillar, Chevron, Coca-Cola, ConocoPhillips, Ford, GE, Guardian, 
JHPIEGO, Johnson & Johnson, Merck, Microsoft, Monsanto, Pfizer, 
Philip Morris, Rockwell Collins, Time Warner and UPS.  END SUMMARY. 
 
¶2.  (SBU) COMMENT: The Abhisit administration has placed a priority 
on reaching out to the business community to identify and address 
longstanding concerns raised by both domestic and international 
companies, and the American business community has been very pleased 
with Abhisit's engagement and responsiveness to their concerns. 
While no outstanding commercial issues have been resolved yet as a 
result of this engagement, the business community is optimistic that 
the government is sincere in wanting to address their concerns.  END 
COMMENT. 
 
--------------------------------- 
Prime Minister's "One-Start Shop" 
--------------------------------- 
 
¶3. (SBU) In a candid and open exchange with Ambassador John and 37 
members of the U.S. ASEAN Business Council mission to Thailand on 
March 2-4, Prime Minister Abhisit Vejjajiva stressed that his 
government is "pro-business."  Ambassador John introduced the group 
to the Prime Minister and described the extensive investments and 
long-standing commitments of these companies in Thailand.  The 
Ambassador noted that U.S. businesses employ more than 250,000 Thai 
nationals, significantly contribute to the more than $32 billion in 
bilateral trade each year, and over the years, have invested an 
estimated $35 billion in Thailand.  He explained that the mission of 
the ASEAN Business Council's trip was to engage with Abhisit's 
newly-elected government to seek ways to improve the business 
climate in Thailand. 
 
¶4. (SBU) In welcoming the group, Abhisit made it clear that he was 
aware of Thailand's outdated business laws and regulations and how 
these rules often slow down business operations rather than support 
business development.  He acknowledged that it will take time and 
effort to amend the laws and regulations of concern, and proposed, 
as an interim solution, the creation of a "one-start shop," which 
would house various ministry representatives in the Prime Minister's 
Office to address specific business concerns and coordinate the 
government's response to business issues that cut across ministry 
lines. 
 
¶5. (SBU) The Prime Minister joked with the delegation that most 
"one-stop shops usually do exactly that, 'stop' or prevent a 
solution rather than find one."  He, therefore, wants to call his 
version a "one-start shop," where businesses can seek immediate 
assistance from his government to resolve outstanding issues. 
Abhisit explained that the ministry representatives would then 
liaise with one another to seek solutions to the outstanding issues 
raised by the business community, presumably where legislative fixes 
would not be required.  The Prime Minister's overture was welcomed 
by the group.  In the energy sector, for example, companies such as 
Chevron and ConocoPhillips have complained about lack of 
coordination between the Ministry of Finance, Ministry of Industry 
and the Ministry of Energy to address issues such as access to 
resources, alternative energy, and diversification of Thailand's 
energy resources. 
 
¶6. (SBU) Some business issues are caught up in foreign policy 
challenges.  ConocoPhillips raised the long standing issue of 
overlapping claims between Thailand and Cambodia over the 27,000 sq. 
km fossil fuel reserve in the Gulf of Thailand. The Prime Minister 
noted that the Joint Technical Committee needs to be re-activated to 
address this issue. 
 
----------------------------------- 
Ambassador Stresses the Rule of Law 
----------------------------------- 
 
BANGKOK 00000707  002.2 OF 002 
 
 
 
¶7. (SBU) Ambassador John met with the delegation separately to 
provide an overview of the extensive services that the Embassy 
provides to U.S. businesses and the advocacy that we regularly 
perform on their behalf.  He also provided an assessment of the 
current political, economic, and commercial situation in Thailand. 
The Ambassador noted the Abhisit administration's efforts to improve 
Thailand's business climate, while simultaneously managing a 
relatively fragile government coalition.  Nevertheless, he also 
stressed that many observers may have been making too much of 
Thailand's political uncertainties as politics rarely affects 
business as usual (the airport closures last year being a striking 
exception).  Rather, U.S. companies should focus on rule of law 
issues, such as contract enforcement, IPR, and tax manipulation, 
that have a more significant effect on the business environment. 
During an extensive question and answer session, company 
representatives explained that they continue to be confronted with 
serious issues of corruption, a lack of transparency in government 
decision-making, and a lack of coordination among ministries. 
 
----------------------------- 
Customs Issues Top the Agenda 
----------------------------- 
 
¶8. (SBU) Speaking on behalf of the express mail delivery industry, 
UPS explained that the industry wants to engage the Thai government 
in a discussion on the logistics industry as a whole.  The express 
delivery component is simply a piece of the industry, and a more 
comprehensive government plan could help make Bangkok a regional 
logistics hub.  In follow-on consultations with the Embassy, UPS and 
FedEx expressed an interest in hosting a logistics forum in Thailand 
to highlight the possibilities that could be derived from true 
express delivery systems and modernized customs processing.  With 
customs laws over eighty years old, Thailand's customs regime is 
years behind the express customs regimes in neighboring Singapore, 
Hong Kong and Taiwan. 
 
¶9. (SBU) Philip Morris also expressed its frustrations dealing with 
Thai Customs.  The company continues to struggle with a lack of 
transparency and consistency in customs valuation and a lack of 
coordination between the various ministries.  According to Philip 
Morris representatives, from August 2006 until March 2008, Thai 
Customs systematically rejected the transaction value declared as 
the basis for valuation and arbitrarily imposed values that were 
higher than the declared transaction values to all entries of 
imported cigarettes. 
 
--------------------------------------------- ------ 
Pharmaceutical Industry Remains Concerned About CLs 
--------------------------------------------- ------ 
 
¶10. (SBU) In response to an Abbott inquiry on the future use of 
compulsory licenses, Abhisit clearly stated that any future 
consideration of compulsory licenses would be undertaken as a 
measure of last resort and this government would only do so in a 
consultative manner with the rights holders.  Abhisit cautioned that 
if the U.S. continued to place more pressure on Thailand with 
regards to this issue, that there could be backlash and increased 
political pressure from health care activists and NGOs to issue more 
CLs.  Abhisit expressed dismay to learn that the pharmaceutical 
industry had recommended that Thailand be downgraded to Priority 
Foreign Country (PFC), despite his administration's good faith 
efforts to improve Thailand's IPR regime.