Pongsak Ruktapongpaisal, deputy commerce minister, said the average tariff rate on goods traded between Thailand and Australia was now about 9 percent.

Thailand exports 5,000 product items to Australia, compared to 6,000 Australian products exported to Thailand.

After January 1, 2005, Ponsak said, the tariffs on about 48 percent of all Thai exports to Australia will fall to zero. On the other hand, 83 percent of 6,000 items of Australian imports to Thailand will fall to zero.

Thailand and Australia completed bilateral free trade agreement talks in Bangkok earlier this week. The Thai permanent secretary for commerce acted as head of the Thai delegation.

Ongoing negotiations between the two countries have overcome all the sticking points and have been drafted into a legal text, which will form the basis for the FTA between the two countries.

Each side will have to take the legal text back to its government for final deliberation before the FTA can be signed.

The Thai-Australian FTA has been negotiated in a comprehensive package, covering all items of goods and services and investment.

In the FTA, according to a document prepared by the Thai Commerce Ministry, Australia has agreed to slash tariffs on all items imported from Thailand to zero per cent over a period of five years after the FTA comes into effect.

The exemption is the textile sector, in which Australia aims to phase out tariff reduction to zero percent over a period of 10 years.

Thailand and Australia will set up a joint panel to discuss Thai vegetable and fruit exports to Australia, which are facing health or non-tariff restrictions.

This should lead to Thai vegetable and fruit exports to Australia. In investment and services, Australia will allow Thai nationals to invest in different businesses such as legal advisory services, architecture, auto-repair shops, telecommunications, education, mining and all types of manufacturing.

In return, Thailand will allow Australian nationals to invest in big projects with intensive capital investment with a share ownership ratio of up to 60 percent.

These businesses include trade exhibition centres, conference halls, infrastructure construction projects, technology education institutes, hotels, aqua parks and marina projects.

Last year Thailand imported US$1.57 billion (Bt61.8 billion) worth of goods from Australia, while Australia imported some $3.73 billion worth of goods from Thailand.

The Thaksin government has already signed FTAs with Bahrain and China.

It is negotiating with a host of other countries, such as the US, Japan and India, to pry open foreign markets for Thai goods and to further open up Thai markets to trading partners.