The Impact of Section 508 Sanctions on Thailand and Fiji: Helpful or Harmful to U.S. Relations?

Mr. Chairman, Ranking Member Manzullo, and Members of the Subcommittee, thank you for the opportunity to testify before you today regarding the impact of Section 508 sanctions on Thailand.

Ties between Thailand and the United States are multi-faceted and run deep. As one of our oldest and closest allies in East Asia, Thailand has maintained strong diplomatic relations with the United States for over 174 years. From scientific collaboration to joint disaster relief operations, peacekeeping and travel and tourism, U.S.-Thai interests are intertwined and enduring. Thailand also was one of the first to offer aid to the United States after Hurricane Katrina and lent its air base in Utapao for U.S. troops to launch humanitarian aid to the thousands displaced after the 2004 Indian Ocean tsunami.

The partnership between the United States and Thailand has brought other important benefits to the U.S. As a major non-NATO treaty ally of long standing, Thailand remains an important U.S. partner in promoting peace and security in Asia and in other parts of the world. Access granted by the Thai government to facilities in Thailand is critical to executing our highest priority military operations, and the Thai have further supported those missions with their own personnel. Thailand also hosts major bilateral and multinational military exercises that are critical to maintaining our forces’ readiness and interoperability with allies, and its troops have participated in international peacekeeping missions in Cambodia, East Timor, Afghanistan, Iraq, and soon in Darfur.

Bilateral engagement goes far beyond military cooperation. The United States and Thailand work together across the spectrum of international issues of importance, from combating trafficking in persons and narcotics, to containing the spread and impact of avian influenza, to facilitating mutual trade and investment that benefits both our countries. Our partnership is based on strong, shared national interests.

Against this backdrop of robust relations and cooperation, the coup of September 19, 2006 presented a major challenge for the bilateral relationship. The coup was clearly a setback to democracy in Thailand and all of East Asia, and a deep disappointment to the United States. We immediately made clear to the coup leaders and interim authorities that we desired a rapid return to democracy as the best way to ensure peace, prosperity and stability for the Thai people.

Section 508 of the Foreign Operations Appropriations Act restricts assistance to governments of countries where a duly elected head of government is deposed by military coup or decree. In accordance with Section 508 requirements, we suspended a significant number of bilateral assistance programs to the Thai government in the immediate wake of the coup. They are still suspended and will remain so, as required by law, until there is a determination that a democratically elected government has taken office.

In total, 508 sanctions resulted in the reallocation of over $35 million in Fiscal Year 2006 and 2007 assistance funds originally intended for Thailand. These funds were largely focused on military training and assistance programs, with some trade and development technical assistance affected as well. Recognizing that to suspend all foreign assistance programs to Thailand would be counterproductive, the U.S. continued to provide approximately $34 million in assistance to the Thai government, in order to fund select development, democracy promotion, disaster assistance, counter-terrorism, counter-narcotics, trafficking in persons, and refugee assistance programs.

Throughout this difficult period in our bilateral relationship, we have made clear to the Thai that our criticism of the coup reflects the strength of our commitment to a solid, enduring relationship with a close and trusted ally, not a weakening of this bond. We believe that democracy is vital to Thailand’s stability and continued development and to the strength of our alliance. We have consistently emphasized to the Thai authorities at the highest levels over the past nine months the importance of returning to democracy as soon as possible and of adhering to the timetable they initially laid out to accomplish that objective. We also remain concerned about the government’s failure to lift martial law in all provinces where it was imposed following the coup. Equally troubling, the new draft Internal Security Act appears to provide the military with increased power, although support for the Act in the National Assembly appears to be waning. We have made it clear that our relationship will be circumscribed until democracy is restored.

The Thai interim government has made significant moves to return the country to democratic rule, with a national referendum on the draft constitution scheduled for August 19 and national elections planned for November or December of this year. Our expectation is that Thailand will return to a democratically elected government by year’s end, and we look forward to resuming fully normal relations with our longstanding ally next year.

Thailand’s steady progress toward restoring democracy reflects not only Thailand’s commitment to constitutional government, but also the effectiveness of U.S. policy approach, which includes the 508 sanctions implemented after the coup. The strong policy measures we took in response to the coup carefully balanced our need to underscore our rejection of the coup with our imperative to encourage restoration of democracy and to preserve the core U.S. national interests advanced by our strong relationship with Thailand.

Thank you Mr. Chairman. I would be happy to answer any questions you might have.