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“31477”,”4/26/2005 10:22″,”05BANGKOK2838″,

“Embassy Bangkok”,”CONFIDENTIAL”,””,

“This record is a partial extract of the original cable.

The full text of the original cable is not available.


“,”C O N F I D E N T I A L SECTION 01 OF 05 BANGKOK 002838






E.O. 12958: DECL: 04/22/2015







Classified By: Ambassador Ralph L. Boyce. Reason: 1.4 (b,d)


1. (C) Mr. Deputy Secretary, on behalf of the entire

Embassy community, I welcome you to Bangkok. You are

visiting at an opportune point in our negotiations with the

Thai on a Free Trade Agreement (FTA). With Prime Minister

Thaksin Shinawatra no longer distracted by elections and

firmly back in power for four more years, your meeting with

him offers the best opportunity to move forward on an

agreement that will benefit both countries, and could stand

as one of his finest legacies to Thailand. Thailand and the

U.S. have deep historical ties of friendship and currently

cooperate in the War on Terrorism and generally in ensuring

international stability. Thailand has in recent years

provided access that allowed the U.S. to prosecute the war in

Afghanistan, sent non-combat troops there and to Iraq, and

helped us capture the Jemaah Islamiyah (JI) leader Hambali.

The Thai share many of our views on free markets, the free

movement of goods and people, and democratic principles. You

will encounter a Thai leadership that is confident, enjoying

an expanding economy, a relatively stable emerging democracy

and a growing political profile in the region. After an

overview of bilateral relations (paras 2-5), and an overview

of the domestic political and economic landscape (paras

6-10), our views on key issues you should raise begin at para








2. (SBU) Bilateral relations with Thailand are generally

quite good. Thailand is a security treaty ally and has been

supportive of the Global War on Terror. The capture of the

JI leader Hambali in Thailand in 2003 highlighted the

willingness of the Thaksin government to cooperate fruitfully

against international terrorism. We are Thailand\’s largest

export market. American businesses have over $20 billion in

direct investment in Thailand, and we are the second largest

investor after Japan. Recent decisions to remove Thailand

from the President\’s list of major narcotics transit or

producing countries and to impose less stringent tariffs on

Thai shrimp exports to the United States than we impose on

Thailand\’s competitors were favorably received. Our quick,

massive, and unprecedented response to the tsunami disaster

last December reminded the Thai that the United States has

unique capacities to address crises and pursue humanitarian

goals. The U.S. military response to the tsunami validated

decades of close U.S.-Thai security cooperation and our

extensive bilateral exercise program. Your visit here will

help reassure Thai officials and the Thai public that the

United States is politically committed to remain engaged in

Southeast Asia and determined to work closely with Thailand

and other ASEAN and APEC members.




3. (C) The U.S. military conducts a wide range of major

exercises and training programs with Thailand each year,

including Cobra Gold, the annual exercise which in 2004

involved approximately 13,500 U.S. service members and 6,000

Thais. Cobra Gold 2005 — which will be underway during your

visit — will be smaller than last year, primarily due to

U.S. commitments elsewhere and the large number of U.S.

forces sent to the region for tsunami relief. In addition to

field training involving thousands of U.S. and Thai troops,

Cobra Gold this year will consist of a one-week Disaster

Seminar in Chiang Mai to capture lessons learned from the

tsunami response and a one week staff exercise during a



disaster will be gamed out. Significantly, Singapore and

Japan will both participate in the Seminar and staff exercise.




4. (U) There are also points of friction in our relations.

Human rights remain a key concern. On October 25, 2004,

poorly trained military and civilian security forces in

southern Thailand loaded 1,300 Thai Muslim protesters into

trucks to be transported to a military base nearly three

hours away. 78 of the protesters died, apparently

suffocating en route. The State Department\’s

Congressionally-mandated annual Human Rights Report (HRR)

also criticized the approximately 1,300 extrajudicial

killings that took place in early 2003 as part of PM

Thaksin\’s war on drugs. The RTG has complained this year

about the 2004 Thailand chapter of the HRR, as it has



5. (C) Thailand\’s policy of \”constructive engagement\” with

the military junta in Burma and provision of economic

assistance to Rangoon is a source of continuing frustration

for us. The Thai government supports democracy in Burma but

maintains, not altogether convincingly, that engagement with

the SPDC is the only realistic approach it has to make

progress on the major cross-border flows of refugees, illegal

economic migrants, and methamphetamines it faces from Burma.

While ASEAN members such as Singapore, the Philippines,

Indonesia and Malaysia are clearly uncomfortable with Burma\’s

assumption of the organization\’s chair next year, the RTG has

clung to the position that engagement with the regime offers

the best hope of promoting gradual change. We obviously

disagree and have told the Thai that they are increasingly

viewed in the U.S. and elsewhere as \”part of the problem\”

when it comes to Burma.




6. (SBU) Prime Minister Thaksin was returned to power with

a strong majority in early February, winning more than 375 of

the 500 seats in Parliament. His Thai Rak Thai (Thais Love

Thais) political party dominates domestic politics. This

election was the first time in Thai history that an elected

civilian Parliamentary government filled out its entire term

and was reelected. The Prime Minister\’s populist policies,

public relations savvy and a booming economy resonated well

with the Thai electorate. Thaksin comes from a prosperous

Sino-Thai family in Thailand\’s second largest city, Chiang

Mai, and placed first in his class at the National Police

Academy. He spent several years studying in the United

States — earning a master\’s degree in Criminal Justice from

Eastern Kentucky University and a Doctorate in Criminology

from Sam Houston State University. (Thaksin likes to

jokingly refer to himself as an \”honorary Texan.\”) After a

few years with the police, he left government service to run

the family business (Shinawatra Corporation or Shin Corp),

which he turned into Thailand\’s largest telecommunications

company, making himself a multi-billionaire in the process.

Thaksin characterizes himself as a \”CEO Prime Minister\” and

portrays himself as a decisive leader. Critics, with some

justification, accuse him of stifling dissent within his

government and filling key government positions with family

members or classmates. Following several meetings in

Washington and the very successful October 2003 Bangkok APEC

Summit, Thaksin believes that he enjoys a special

relationship with the President.




7. (U) The Thai economy grew 6.1 percent in 2004, continuing

its strong recovery from the 1997 financial crisis. The

recovery has been led by strong export growth to the

traditional Thai markets of the U.S., Japan and EU as well as

increased exports to ASEAN and China. To complement the

export sector, the Thaksin government promoted a \”dual track\”

strategy of increasing Thai consumption. By making credit

more easily available, especially in rural areas, an easy

monetary policy and the introduction of new consumer finance

products, consumer demand has been a key factor in the Thai

economy\’s recent growth. Thaksin recognizes that consumer

demand has pretty well run its course, however, as consumer

debt levels have almost tripled in the past four years.

Going forward, the RTG expects investment to become the new

second track to exports in the economy and the government is

promoting a massive program of infrastructure investment over

the next four years. There is concern that in 2005, the

effects of high oil prices and a slowdown in the economies of

Thai export markets will reduce GDP growth. The December 26

tsunami also will affect the rate of growth this year, with



the falloff in tourism (which contributes six percent of

total GDP) expected to shave 0.5 percent off of this year\’s

economic growth rate. Most economists anticipate growth

slowing to 4-6 percent for the year while the official RTG

estimate is for 5.5-6.5 percent GDP increase.




8. (U) The December 26 tsunami claimed about 5,400 lives,

including two dozen Americans confirmed or presumed dead. In

addition to large-scale provision of food, potable water and

clothing through the regional relief logistical base

established at Utapao airfield, the USG also dispatched a

team of forensic experts to the affected areas in the

vicinity of Phuket to assist in victim identification.

Longer-term assistance is being provided by USAID in the form

of replacement of small fishing boats and the provision of

start-up loans for the recovery of small-scale aquaculture

and tourism-related businesses. Thailand is also eligible

for a USD $150 million soft loan facility OPIC is making

available to tsunami-affected areas.




9. (U) Thaksin\’s biggest domestic challenge is the

unsettled security situation in the southern part of the

country. Southern Thailand, and in particular the three

southernmost Muslim majority provinces of Pattani, Yala, and

Narathiwat, has experienced episodic violence since it was

incorporated into the Siamese Kingdom in 1902. However, 2004

witnessed a dramatic increase in the level of violence, with

over 500 people killed either by militants or by security

forces. Local Muslim separatist militants have attacked

symbols of Thai and Buddhist authority, and there continue to

be almost daily incidents of violence, notably even after the

tsunami disaster of December 26. Attacks most often involve



isolated shootings of local officials, although increasingly

sophisticated bombing attacks have become more common. On

April 3, bombs apparently set by separatists exploded at Hat

Yai International Airport, a French-owned supermarket in Hat

Yai and a hotel in Songkhla. Two Americans were injured in

the incidents, though there is no indication that they were

specifically targeted.


10. (SBU) Stepping back publicly from the strictly

hard-line approach he has taken since the upsurge of

violence, Thaksin approved in March a 48-member \”National

Reconciliation Commission\” (NRC) to examine long-term

solutions to the crisis in the south. Thaksin named former

Prime Minister Anand to lead the commission. (Note: Anand is

one of the most respected public figures in Thailand. He was

twice appointed interim prime minister in 1991-92 during the

political crisis stemming from the 1991 coup. He recently

chaired a UN High-level Commission on Reform. End Note.)

Thaksin said he wanted a diverse group of participants on the

commission, even naming several of the most vocal critics of

his southern policy as possible members. The NRC expects to

complete its work and to make recommendations within a year.




11. (C) The third round of FTA negotiations with the RTG,

held only after the U.S. agreed to exclude discussion of

financial services, concluded on April 9 with modest progress

in most chapters of the FTA text. While Prime Minister

Thaksin remains publicly supportive of the FTA, there is

little indication that he has authorized his ministers to

make commitments on coverage, concessions, and possible trade

offs, that is, to actually negotiate the FTA. Agreement on

FTA coverage is Priority #1: still to be resolved is

inclusion of financial services and (to varying degrees)

chapters on IPR, labor, and environment. With the Thai

elections behind us and the reconstitution of the RTG\’s FTA

Oversight Committee, prospects for development of a

comprehensive negotiating mandate appear to have improved

somewhat. Your meetings with the Prime Minister, Foreign

Minister, and the outreach events present opportunities to

obtain a clearer Thai commitment to move these issues forward

in the FTA. The Thai press has been almost uniformly

negative in its FTA coverage. In your comments to the media

it will be important to emphasize not only the considerable

benefits the FTA will afford Thailand, but also the high

opportunity costs entailed in opting out.




12. (C) Thailand dispatched two deployments to Iraq as part

of Operation Iraqi Freedom (OIF). In December 2003, two Thai

soldiers were killed by a car bomb while on duty in Karbala.

Thailand\’s second six-month deployment of 443 medics and

engineers to Iraq ended on September 30, 2004. While

participation in OIF did not cause the domestic furor in

Thailand that it has in other countries, Thaksin\’s critics

have used participation in the U.S.-led coalition against

him. Several RTG officials have told us that Thailand\’s

deployments have been used by separatist militants to fan

resentment in the Muslim majority southern border provinces.

The democratic political opposition has questioned his

judgment on the deployments as well, also claiming that they

contributed to tensions in the volatile South. Nevertheless,

Thaksin has shown the capacity to make a tough decision and

we want Thailand\’s renewed support for Iraq operations.

During your meetings with Thaksin and Foreign Minister

Kantathi you could express appreciation for Thailand\’s

previous deployments to Afghanistan and Iraq, and explain

that the Administration hopes Thailand will send a follow-on

deployment in support of OIF. Specifically, CJCS General

Myers recently sent a letter to his Thai counterpart asking

Thailand to consider sending staff officers to man the OIF

Multinational Headquarters, with an eye to future

deployments. It would be appropriate for you to press your

interlocutors on a positive Thai response to General Myers\’





13. (C) Thailand recently announced its plans to purchase

18 fighter aircraft to replace aging F-5s in the Thai Air

Force. (The RTAF presently has 59 F-16s in its inventory.)

The RTG is leaning towards purchasing Swedish or Russian

planes because of a belief, which we have worked hard to

overcome, that Saab or Sukhoi can offer a better business

deal to Thailand. Recently, Lockheed Martin executives have

made it clear to Thai decision makers that their company will

put together a countertrade package equal to up to 100

percent of the purchase price of any aircraft. This promise

has allowed RTAF officers — who generally support the F-16

— to put together a package more favorable to Lockheed

Martin. Rumors are rife that some senior Thai Air Force

officers may be receiving compensation from one of the other

two competitors to support their bids, but we believe that

pressure from senior U.S. officials like yourself can improve

Lockheed Martin\’s prospects. A genuinely transparent

competition that takes into consideration capability of the

aircraft, interoperability with U.S. forces, and cost would

result almost certainly in F-16 winning the contract. It

would be extremely helpful to this effort if you would point

out the interoperability advantages F-16 has over SU-30 or

Gripen, and how the F-16 is the best choice to defend

Thailand. Lockheed Martin is prepared to offer a 100 percent

countertrade package as part of the purchase agreement.





14. (C) The RTG continues to move towards formal

endorsement of the Proliferation Security Initiative (PSI)

Statement of Principles (SOP). The RTG has indicated that it

supports the PSI but has been dragging its feet, largely

because of bureaucratic misunderstanding, over final

endorsement of the SOP. Given Thailand\’s strategic location

and our emphasis on practical nonproliferation steps, we are

very interested in gaining Thailand\’s participation in this

key nonproliferation initiative. It would be very helpful if

you could underscore the great importance we attach to

Thailand\’s endorsement of the PSI Statement of Interdiction

Principles. If your interlocutors question what that obliges

Thailand to do, you may note that endorsing the Principles is

a first step and does not obligate a country legally or

operationally, but is a significant statement of political





15. (U) Over 140,000 Burmese refugees live in camps along

the Thai-Burma border, some for more than a decade. Apart

from the camp population, there is a separate group of

so-called \”urban\” Burmese. Thailand agreed to a resettlement

program for this second, much smaller group and we are

currently working with UNHCR to process about 1,400 of them

(1,500 individuals have already re-settled in the U.S.). The

RTG recently implemented — after twice agreeing to our

request for delays — a decree that urban Burmese refugees

relocate to the border camps. Those who did volunteer to

relocate are likely to be resettled within months, many to

the U.S. You should be aware that NGOs and Congress have

expressed concerns that urban Burmese refugees who do not

report to the camps might be forcibly deported back to Burma,

but RTG officials have credibly assured us there are no plans

for either deportations or to actively hunt persons who did

not register for relocation to the camps. In a major

breakthrough, the Thai Government also approved last week our

project to begin resettlement of Burmese camp refugees — a

development which could lead to the U.S. resettlement of tens

of thousands from this group over a multi-year period. You

could say that the U.S. welcomes the Thai government\’s

agreement to Burmese resettlement from the border camps and

looks forward to working with Thai officials to ensure that

the new program runs smoothly.



Written by thaicables

July 7, 2011 at 5:19 am

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