The decision was made at the 35th High Level Task Force on Asean Economic Integration (HLTF-EI) meeting, held last week in Bangkok.

“There are ‘new issues’ that have risen with regards to negotiating FTAs, particularly with developed countries,” Boonyarit Kalayanamit, permanent secretary at the Commerce Ministry, said yesterday at a press conference.

“These are issues such as labour force standards, intellectual property, sustainability and the environment,” he explained, noting that FTAs no longer concern only trade liberalisation.

Last week’s meeting will be followed by the Asean economic ministers’ retreat, to be held in Phuket next month, with Thailand as Asean chair continuing to push for regional economic integration.

The meeting agreed that the relevant Asean committees should strengthen their efforts to assess the level of readiness of each Asean member to reach the international standard for these new issues, he said.

“Admittedly, Asean’s regulatory standard is still lagging behind on these new issues, and work needs to be done to raise them up to the international standard so that future obstacles to FTA negotiations between Asean and other countries can be reduced,” Boonyarit said.

The meeting agreed there was a need for a proper timeline to study these new issues, as well as the implementation of the necessary measures to tackle them. Yet no specific timeline was set at the meeting, he said.

However, the task force agreed on the need for Asean to increase its role in reforming the WTO, he continued.

One such reform effort is a seminar, “WTO Reform: Perspectives for Asean Countries”, to continue today after kicking off yesterday.

Currently, the WTO’s general council – the highest-level decision-making body of the organisation – is chaired by Ambassador Sunanta Kangvalkulkij of Thailand.

“Hence, Thailand has called on other Asean countries for a concerted effort to reform the WTO so that it can increase its role globally in the face of new issues,” Boonyarit said. He did not suggest the particular aspects of the WTO that need reforming.

Turning to the issue of tackling non-tariff measures (NTM) between Asean members, Boonyarit noted that the Economic Research Institute for Asean and East Asia has been aiding Asean in conducting regional research to assess the total cost of trade transactions as a result of NTMs.

The study results should be released in the middle of this year, he said. “When they are released, we can determine our policy direction and achieve our goal of reducing trade transaction costs.”

The combined members of Asean currently make up Thailand’s largest trading partner. In 2018, 22.69 per cent of Thailand’s total trade went to Asean, valued at some Bt3.67 trillion. In January, Thai-Asean trade was valued at Bt285 billion, a 3.18 per cent growth contraction year on year, according to Ministry of Commerce figures.

Speaking to a seminar held by CLSA Securities (Thailand), Prayut said this was an important year for Thailand. As the Asean chair, it could cooperate with other Asean countries for mutual gain and eventually grow the regional economy to the fourth largest world grouping.

Prayut said he expects to finalise the Regional Comprehensive Economic Partnership (RCEP) soon. Thailand is also interested in being a member of Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other important economic alliances, he said.

Asean will see more connectivity through trade, investment and tourism, along with cooperation in innovation, industrial reform and labour skill development. The Digital Asean concept will also be promoted for technological advancement, higher regional competitiveness and cyber safety, he said.

“The global situation is constantly changing and countries need to partner. Thailand can be an answer for foreign investors as the country is situated in the centre of Asean with a large potential market,” he said.

The Thai government supports infrastructure projects, aiming to consolidate Thailand as a key economic corridor within Asia, he said. In the initial period the government has pushed for special economic zones, particularly the Eastern Economic Corridor (EEC), as the region’s trade and investment centre.

In response to a question on the long-term EEC development, Prayut said the government had set an ongoing budget for this project and put it into the 20-year national strategic plan along with the EEC bill and the EEC Office. Foreign investors feel reassured with the planned Digital Park Thailand (EECd) and Eastern Economic Corridor of Innovation (EECi) which will also have continued budget and project assessment on a five-yearly basis.

He said Thailand’s competitiveness will be enhanced through three concepts: extension from the past – the economic roots, identity, culture, tradition, living style and diverse natural resources, along with technology and innovations; adjustment in the present through transportation networks, scientific, technological and digital infrastructure, along with environmental improvement for future industrial and service development; and build-up of new value in the future via increased capacity of business operators, development of new-generation people, along with business remodelling to match market demand amidst rapidly-changing technologies, he said.

Thailand’s development directions are inline with the three-part Asean theme: advancing, partnership and sustainability.

“The private sector will come as a strength to develop Asean, aiming to narrow gaps and grow together for long-term development,” Prayut said.

Songkran Pakdeejit, president of the Burley Tobacco Farmers Association of Phetchabun, on Thursday met with representatives from the Democrat Party, Pheu Thai, Bhumjaitahi, Chartthaipattana, and Seri Ruam Thai to discuss the affect of the new tax rate on tobacco farmers.

Cigarettes are liable for tax both in terms of volume and value, regardless of price, under the current excise tax structure. The tax based on value is divided into two rates, or 20 per cent of suggested retail price for cigarettes priced below Bt60 per pack and 40 per cent for those priced more than Bt60.

The new structure, which will come into force on October 1, will see tax for cigarette packs priced Bt60 or lower raised to 40 per cent, or the same rate applied to packs priced above Bt60.

That means the retail price for a pack will also increase.

According to the network, it is expected that the retail price per pack will increase by about Bt30 per pack to cover the new tax rate.

The network said that the new rate will push some consumers to buy illicit cigarettes which are cheaper.

Songkran said around 50,000 households of tobacco farmers in North, Northeast, and upper Central region were struggling with the cigarette tax rate that increases every year.

That would affect the cigarette production and sale volume of the state-run Thailand Tobacco Monopoly that would reduce the quota of tobacco they buy from farmers, Songkan said.

“We are so concerned if we have to quit our career,” he said.

Previously, the network asked authorities to delay enforcement of the next tax hike but so far there is no response, he added.

As the election is going to be held in the next two weeks, Songkran asked the parties to recognise their concerns and bring the issue to their parties in order to win the votes from the farmers.

Democrat Mallika Boonmee-trakool said she would take the concern to the Finance Ministry asking for a delay in enforcing the new tax rate. Her party would find a long-term measure to help the farmers, such as finding additional farming for them, she added.

At the meeting, the Thai Tobacco Trade Association released a poll result showing most grocery shops were opposed to the increase.

Jointly conducted by the association and Nida Poll in February, 81 per cent of respondents from 1,056 retailers across the country believed the new tax would increase the sale of illicit cigarettes.

Ninety-one per cent of respondents said they would be affected by the tax rate.

Association director Waraporn Namat said that in the past four to five years the government has gradually increased the tobacco tax rate in the hope of reducing the number of smokers.

“But the number [of smokers] hasn’t decreased significantly and instead they opt for buying illicit cigarettes or tobacco which are cheaper,” she added.

Step out of your office, and a self-driving car might bring you home. Reach your doorstep and you can command a device to play your favourite music.

Smart robots have not taken over the world, yet. But they continue to take over tasks traditionally performed by humans. Today, there are 74 robots for every 10,000 workers in the manufacturing sector of developed countries excluding Japan, according to the International Federation of Robotics. This ratio is lower in emerging markets, which employ 15 robots for every 10,000 workers.

Robots are proving to be able helpers. As labour markets tighten and a number of economies reach full employment, cobots or collaborative robots, can continue to gain favour with businesses. Cobots make repetitive or physically challenging tasks safer for workers. They also ensure higher work quality and are more productive. Beyond factories and logistics fulfilment centres, cobots can also assist people in their everyday lives and help in areas like care for elderly people.

The increasing digitalisation of our homes, our industries and our cities is giving rise to opportunities in the field of artificial intelligence (AI). This refers to human-like intelligence in machines used to solve challenges society faces such as energy consumption, traffic flow and healthcare costs. Whether in medical imaging and diagnosis or in creating a perfect retail store experience, there are increasingly more concrete test cases of AI reaching full commercialisation.

Healthcare a key growth area

While the headlines focus on the large industrial and tech names expanding their AI and robotics capabilities, smaller firms and start-ups are enjoying increased funding and stronger interest around mergers and acquisitions.

A key growth area is healthcare. The medical hardware and equipment space has been revolutionised with the introduction of robotics, which improve the precision and speed of surgical and treatment procedures. Yet it is perhaps in the medical imaging field where the use of AI-enabled automation can blossom.

Give a machine an X-ray to read, and it might be able to, from its database of thousands of similar X-rays, diagnose a problem you might have – all without the help of a doctor. Research firm Tractica identifies medical imaging as the most important use case in the healthcare AI market, be it in software, hardware or services. This market can reach US$19.3 billion (Bt611.16 billion) by 2025, according to the firm.

Outside of healthcare, another key growth area is logistics, such as storage planning or last-mile delivery. The use of AI can lead to insourcing: companies solving complex logistics problems themselves, instead of relying on outside help. Meanwhile, autonomous vehicles like drones, self-driving cars or robo-taxis can reduce the economic costs of traffic jams or offer new services for consumers and businesses.

Yet the growth of the robotics and AI market can lead to challenges such as regulation. The potential for global adoption might be limited as governments fear the consequences of technology and data being centralised in the hands of a select number of firms.

How to invest

So how does one invest in the robotics and AI space?

We believe there are opportunities in smaller technology companies that are run by their entrepreneur founders. On the other end of the spectrum, legacy companies with disruptive technologies and which demonstrate a clear innovation focus can also be interesting investments.

Exchange-traded funds (ETF) investing in the sector are easy to access and low-cost. Another option is investing in diversified funds dedicated to the AI or robotics space. These funds tend to invest in more small and mid-cap firms, which offer a different risk-reward profile compared to an ETF.

Investors might also like to note that the market for service robots – robots doing tasks outside of the factory, including for personal, commercial or even military use – is larger than the market for industrial robots. Service robots include drone taxis, bakery robots or surgery robots.

Meanwhile, more data-intensive sectors like financials, software, media and healthcare might attract greater investor attention.

We believe the main beneficiary of AI and robotics is the IT sector. Those considering investing in robotics and AI equities will need to have a diversified exposure in this space. The market capitalisation of the IT sector has thus grown over time to become a quarter of total global market capitalisation.

At Credit Suisse, we witnessed good levels of participation from our clients on technology-related investment opportunities from as early as 2016, when we also anchored the launch of a robotics equity strategy. Client interest in robotics, and more broadly technology, remains intact throughout market cycles. In a volatile 2018, our fundraising for a digital health strategy, which has relatively meaningful robotics exposure, also achieved sizeable net sales.

Ultimately, AI and robotics is becoming more pervasive across all sorts of fields, even in traditional sectors like agriculture. AI and robotics are thus what we at Credit Suisse deem as a long-term investment theme: a supertrend.

Contributed by MARCUS SLOOR, market group head Thailand & Vietnam, Private Banking Asia Pacific, Credit Suisse and STUART YONG, fund solutions specialist, Credit Suisse Private Banking Asia Pacific