"The scope of talks for the Thailand-EU free trade agreement (FTA) will likely be concluded and submitted for parliamentary endorsement next month", reports the 9 July 2012 edition of the Bangkok Post.  Unlike the FTA between Thailand and China, which is very limited in scope, an FTA with the EU would be more akin to the earlier proposed FTA with the U.S., which required substantial liberalization of market access, customs reform and more rigorous enforcement of intellectual property rights. 

Currently, Thailand imposes broad restrictions on foreign ownership of businesses operating in Thailand and the EU does not enjoy the same broad treaty exception to such restrictions that are enjoyed by most U.S. companies under the U.S. – Thai Amity Treaty.  Allowing EU companies more opportunities to, for example, directly own companies that provide services in Thailand would constitute a major reform to Thailand's investment laws.

And it would happen at a time when the U.S. and other countries are forging stronger ties with other members of ASEAN.  The U.S., for example, is holding negotiations on the Trans-Pacific Partnership (TPP) in San Diego this week.  According to the Office of the United States Trade Representative (USTR):

 Leaders of the nine Trans-Pacific Partnership countries – Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States – [previously] announced the achievement of the broad outlines of an ambitious, 21st-century Trans-Pacific Partnership (TPP) agreement that will enhance trade and investment among the TPP partner countries, promote innovation, economic growth and development, and support the creation and retention of jobs.

Next week U.S. Secretary of State Hillary Clinton will be visiting Cambodia as part of the Asean Regional Forum.  Although tension in the South China Sea is likely to dominate main-stream news reports, enhanced business ties and regional trading pacts will be of more practical significance to the foreign business community in Thailand and the Thai economy generally.