Two Nations, One Friendship
180 Years of Thai-U.S. Commercial Relations
In 2013, AMCHAM is celebrating Two Nations, One Friendship - 180 years of Thai-U.S. relations. The Friendship officially began in 1833 with the signing of the Treaty of Amity and Commerce, but the first U.S.–Thai (then Siam) encounter occurred 12 years before, when an American ship commanded by a “Captain Han” sailed into Bangkok.
As a gift to King Rama III, the American captain presented His Majesty with 500 flintlock guns. In return, the king bestowed the title of “Khun Pakdiraja” upon Captain Han and granted a partial tax exemption on the ship’s cargo.
Treaty of Amity and Commerce
In 1833, King Rama III received a more significant American visitor, U.S. President Andrew Jackson’s appointed envoy, Edmund Roberts. The two men exchanged gifts, and more importantly, negotiated the Treaty of Amity and Commerce, which included a free trade agreement between the two countries, except in rice, firearms, and opium. The treaty was the United States’ first with an Asian nation.
In 1856, U.S. diplomat Townsend Harris and King Rama IV negotiated a revised “Treaty of Amity, Commerce, and Navigation,” which placed limits on import duties and export taxes. That same year, the J.W. Parker Company became the first American firm to open in Bangkok, followed by the American Rice Mill in 1858.
By 1910, Standard Oil and Singer Sewing Machine had entered Thailand and Ford had begun importing automobiles. In 1941, American imports to Thailand were an estimated U.S. $8 million annually.
World War II – A Test of Friendship
The start of World War II and Japan’s capture of French Indo-China halted U.S. –Thailand trade. On December 8, 1941, Japan invaded Thailand and in January 1942, Prime Minister Field Marshal Phibun signed a mutual defense pact with Japan and declared war against the United States.
Many Thais considered the war declaration invalid and the Thai ambassador to the U.S., M.R. Seni Pramoj refused to deliver the document, believing that it did not represent the will of the Thai people. Throughout the war, the United States refrained from declaring war on Thailand.
Growth of American Businesses in Thailand
America’s private sector recognized post-war Thailand as an appealing investment destination. Pan American Airways started flights to Bangkok in 1947, helping to grow Thailand as a tourist destination. Bank of America opened their first Thailand branch on New Road. Adventurous Americans, such as Jim Thompson, stayed in Thailand after World War II and began notable local businesses.
With the intention to establish an entity dedicated to furthering American business interests in Thailand, eight companies and 24 other members registered The American Chamber Of Commerce In Thailand (AMCHAM) in February 1957. AMCHAM's stated objectives were to promote commerce between the U.S. and Thailand, maintain a high level of civic and commercial reputation, promote American interests in Thailand, and give legal and business opinions within the American community.
By 1965, U.S. exports to Thailand totaled U.S. $128 million and during the 1960s and 1970s many of America’s largest companies opened Thai based operations, including Dow Chemical (1967), Johnson & Johnson (1970) and Bristol-Myers Squib (1972).
1960s and 1970s: A Changing Business and Political Environment
Diplomatically, the 1960s began on a high note. His Majesty King Bhumibol visited the United States and was welcomed with a ticker-tape parade in New York City. In 1966 President Lyndon Johnson became the first American chief executive to visit Thailand and a new “Treaty of Amity and Economic Relations” was agreed upon. The reformed treaty granted both Thais and Americans, with some exceptions, “national treatment” to make investments and conduct business activities in the partner country.
President Johnson’s visit coincided with surge in travel between the two countries. A greater number of young Thais were going to the U.S. for their studies and they returned with more than simply a degree, but also a taste for American fashions and consumer goods. Concurrently, an increasing numbers of Americans came to Thailand as tourists and as members of groups like the Peace Corps.
The largest American contingent was the military personnel associated with the Vietnam conflict. By 1968, 45,000 U.S. military personnel (mostly Air Force) were stationed in Thailand. The American presence helped fuel a construction boom. The American designed “Friendship Highway,” brought many rural residents seeking a better living to Bangkok, where businesses and factories were located.
As the conflicts in Southeast Asia dragged-on and, in 1975, ended in communist victories in Vietnam, Cambodia and Laos, the mood in Thailand turned increasingly nationalistic, straining U.S.–Thai relations. In 1972, the ruling military junta announced the Alien Business Law. The Law prohibited or restricted the ability of foreigners to engage in a long list of commercial activities. Americans, it turned out, were not subject to many restrictions thanks to the Treaty of Amity and Economic Relations.
Economic Boom, Crisis, and Recovery
Under stable governments throughout the 1980s and 1990s, business flourished and Thailand became one of the emerging tigers of Southeast Asia. Demands for American goods and services increased at a remarkable pace and enterprising entrepreneurs recognized the changing taste and achieved great success.
Dej Bulsuk left Thailand in 1968 for the U.S. on a Field Service scholarship and “many, many Big Macs later," Dej owned a chain of McDonald’s outlets in Thailand, opening his first store in 1985 at Amarin Plaza, on Ploenchit Road. Bill Heinecke, who had come to Thailand with his parents as a teenager in 1963, developed a consumer empire that included Pizza Hut, and later The Pizza Company, the Marriott, and many other properties.
Less familiar to the mass public, perhaps, but far more important to Thailand’s economy were the arrival of several American industrial giants. In 2005, Chevron acquired UNOCAL and began supplying natural gas for PTT Public Company (PTT), Thailand’s national oil company, which produces one-third of the nation’s demand. The ‘Detroit of the East,’ as the Eastern Seaboard became known, attracted American automotive companies such as Ford, General Motors, Dana Spicer and Goodyear.
However, the economic boom that so impressed the world had fatal flaws. Overexpansion and increasing debt led to the deflation of the Thai baht and economic contraction. But most American businesses remained in Thailand through the economic crisis, with many providing generous donations to support the recovery economy.
In 1998, Thailand’s Finance Minister Tarrin visited President Clinton in Washington, D.C. for the announcement of a U.S. $1.8 billion financial aid package. Thailand soon returned the favor in 2001 by extending the U.S.-Thailand Bilateral Double Taxation Treaty.
After the 2004 tsunami that hit southern Thailand, Americans (both privately and publicly) donated over U.S. $2.83 billion to help the Southeast Asian region. A year later, in 2005, Thailand assisted American victims following Hurricane Katrina, sending 60 doctors and nurses along with a shipment of rice. Most recently, the United States pledged over U.S. $10 million in direct humanitarian assistance and civic aid to help Thailand recover from the 2011 floods in central Thailand.
For over three decades, AMCHAM members have been committed to improving the social infrastructure in Thailand and in 2004, AMCHAM formally registered the AMCHAM Thailand Charitable Foundation (ATCF). To date, over 1,700 Thai University students have received AMCHAM scholarships and nearly 700 schools have benefited from the ATCF’s Adopt-a-School program.
Looking Towards the Future
Thailand and the U.S. remain ever vital to each other’s success. AMCHAM estimates that member companies have contributed over U.S. $50 billion in investments in Thailand and provide more than 250,000 local jobs.
President Obama said during his 2012 visit to Thailand, “Thailand is America’s oldest friend in Asia. Our men and women in uniform have stood together and they’ve bled together, Our business people and entrepreneurs work together to create jobs for both our peoples. Our diplomats, development experts, researchers, and students work together so that our citizens and the people across this region can live in peace and security and dignity.”