The recent controversial rare earths memorandum of understanding (MoU) has forced Thailand to give US investors an edge over other countries in investing in critical minerals projects in the kingdom, an independent analyst said on Monday.
Kasemsant Weerakun, an expert on Asean issues, said in an interview on Good Morning Asean, an Mcot radio programme, that the MoU compelled Thailand to give US companies ‘first opportunity’ with rare earth business deals.
‘Participants expect to have first opportunity to invest, in accordance with domestic laws, in critical minerals assets that may be sold in Thailand or by a company headquartered or incorporated in Thailand,’ he said, citing a clause in the deal.
Prime Minister Anutin Charnvirakul signed the MoU with US President Donald Trump on the sidelines of the Asean summit in Kuala Lumpur on Sunday.
The US president also inked a similar deal with Malaysian Prime Minister Anwar Ibrahim on the same day.
Mr Kasemsant said the two agreements were almost identical, suggesting that the United States had drafted them before submitting them to Thailand and Malaysia for consideration. However, he noted that the wording in the Malaysian version allowed greater flexibility for Kuala Lumpur on certain issues.
‘Participants will work in good faith to prioritize investment from the United States in critical mineral assets that may be sold in Malaysia or by a company headquartered or incorporated in Malaysia,’ the Malaysian-US MoU states.
The Thai-US deal, however, requires Bangkok to inform Washington about potential investors and projects ‘at the earliest practicable moment’, or at least no later than other countries, to ensure that US firms are not placed at a disadvantage. A similar clause was not included in the Malaysian version, the analyst said.
‘(The US) could not compel Malaysia to promptly notify Washington. The entire clause was dropped from the Malaysian MoU,’ he added.
Rare earths are essential minerals used in the production of high-tech products ranging from cars to computers. The agreements separately signed by Thailand and Malaysia are seen as part of Washington’s strategy to integrate both countries into its supply chain amid growing competition with China.
The government is facing a barrage of criticism for rushing into the agreement with the United States, which appeared to have been concluded without any prior public disclosure before the signing ceremony. Critics voiced concerns about the benefits Thailand would actually receive from it.
The government approved the MoU draft in a special cabinet meeting on Oct 23, despite the day being a public holiday. The agreement was later endorsed by the cabinet on Tuesday, following the signing ceremony between Prime Minister Anutin Charnvirakul and US President Donald Trump on Sunday.
Neither cabinet meeting – on Oct 23 and Tuesday – produced a summary of their proceedings. However, details of the MoU were published on the White House website.
Commerce Minister Suphajee Suthamphan Suthumpun told Thairath on Oct 27 that the MoU had been forwarded by the Foreign Ministry to the Industry Ministry and then to the cabinet for approval.
On the same day, Mr Anutin sought to allay public concerns, stressing that the MoU was not legally binding between the two countries and merely reflected American interest in investing in Thailand’s rare earths sector. His statement was echoed by at least two other ministers – Finance Minister Ekniti Nitithanprapas and Industry Minister Thanakorn Wangboonkongchana.
Rare Earth Exchanges, a US-based platform, said the MoU would facilitate American investors’ engagement in the field. ‘If Thailand’s resources – for instance, tin, tungsten, or potential rare earth deposits – attract investment and processing, the country could become part of a US-led supply chain pivot,’ the platform stated on its website.
Mr Ekniti said on Tuesday that the rare earth MoU could give Thailand leverage in negotiations with Washington over reciprocal tariffs. The US currently imposes a 19% tariff on Thai exports.
However, former finance minister Pichai Chunhavajira disputed Mr Ekniti’s claim, saying rare earths were not part of Washington’s agenda during tariff discussions with Thailand.
Mr Pichai also warned that the government should be aware of geopolitical sensitivity on the issue, without referring to China.