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US Sees Once-in-Generation Shot to Reset Rocky Thai Alliance

(Bloomberg) -- Prime Minister Srettha Thavisin has been in office for less than a month, but the US already sees its best opportunity in two decades to get its alliance with Thailand back on track after ties were strained under the previous military-backed regime.

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The democratically elected leader is in New York this week for the United Nations General Assembly and is reportedly bringing his incoming military chief for security talks with the US. While Srettha is seeking an audience with President Joe Biden, he’s indicated that any rapprochement won’t come at the expense of China.

The new premier wants to forge closer ties with the West as he faces increasing pressure to reinvigorate an economy that has lagged the growth of its neighbors even before the pandemic. While in the US, he’ll also court investment from Microsoft Corp., Google and Tesla Inc.

Whether the Biden meeting will happen is unclear, as the US weighs how to engage a government propped up by the pro-military establishment that took power through a coup in 2014.

There’s also the question of how long Thailand’s ruling coalition, comprised of former foes, can last while the pro-democracy party that won the most votes in the general election continues to face the threat of being dissolved.

Even so, Washington sees a rare chance to significantly advance the relationship across a range of areas, from investment and trade to education exchanges and energy, according to a US official familiar with the matter. That could also extend to military equipment, including to upgrade Thailand’s existing aircraft, said the official.

Doing so could help restore ties with an ally that’s increasingly turning to China to boost its key industries just as the US seeks to reshape its regional alliances in the face of growing competition with Beijing.

“The 2014 coup was deeply damaging to Thailand’s international heft and it forced the military government to seek support from China, and since then, Thai foreign policy has been beholden to China,” said Thitinan Pongsudhirak, a professor at Chulalongkorn University in Bangkok. “So, with the new government there will be a qualitative change.”

Thailand is one of the US’s oldest partners in Asia and, along with the Philippines, is just one of two treaty allies it has in Southeast Asia. During the Vietnam war, it provided the US critical military access, and today stands as a staging ground for the region’s largest joint exercises. Washington also counts Thailand as a key regional law enforcement partner.

Read More: Thailand to Hold US Security Talks, PM Says as He Skips Asean

Those ties were strained by a cycle of coups and street protests over the years as military-backed governments cracked down on pro-democracy groups. In 2014, the US condemned the coup led by former Prime Minister Prayuth Chan-ocha, curtailing financial assistance required by its appropriations law.

The need to improve the economy pushed the generals closer to China, which has emerged as Thailand’s top source of investment, according to the Thai Board of Investments. Chinese companies pledged some $1.7 billion in the first half of this year, mostly in electronics parts manufacturing.

“We have had good relationships with the US for 160 years. With China, we have many Chinese descendants, including me,” Srettha said on Monday after disclosing over the weekend that he’ll visit the mainland next month. “China is also key to stimulating our economy going forward. We need to maintain our neutral stance and not take sides.”

As a result, not everyone is convinced that the new government will be quick to warm to the US.

“I don’t see Thailand moving into the direction of the Philippines, where they have openly embraced the relationship more closely and essentially gone in the opposite direction,” said Joshua Kurlantzick, a senior fellow for Southeast Asia at the Council on Foreign Relations.

The US needs a stronger economic policy to match its security ambitions for the region, Kurlantzick said.

Regardless, the Pentagon will explore cooperation in new domains such as space and cyberspace and in its mutual defense education programs and combined military training exercises, spokesman Lieutenant Colonel Martin Meiners, said in an email.

“We’ll continue to seek opportunities to engage with our Thai allies on a range of security issues, to include the modernization of the Thai military,” he said, without commenting on any potential deal to provide equipment to bolster its fleet of aging military jets, following reports that the US declined to sell Thailand F-35 stealth fighters.

The US could also solicit Thailand’s support over the conflict in neighboring Myanmar as nations involved in providing aid to the country seek to expand a humanitarian corridor. The US may also want to renew talks over sanctioning a state-owned oil and gas company controlled by the Myanmar junta that Thai companies have interests in.

Given the opportunity, Srettha will have to determine how far he wants to go in rebalancing ties. Thailand has already moved to resume negotiations for a free-trade agreement with the European Union, the first time since talks were frozen after the 2014 coup.

Srettha’s foreign policy team is “very eager to get Thailand back on its feet,” said Thitinan, of Chulalongkorn University. “They have to be careful in balancing the US-China competition and in doing so, I think, more nuanced.”

--With assistance from Suttinee Yuvejwattana and Patpicha Tanakasempipat.

(Updates with EU trade talks in penultimate paragraph.)

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