Bangkok/Phnom Penh - Thailand on Friday threatened to revoke an agreement on joint petroleum exploration with Cambodia and close their common border to trade in an escalating diplomatic spat over fugitive former Thai premier Thaksin Shinawatra. Thai Foreign Minister Kasit Piromya, currently in Tokyo attending a regional summit, said he would ask a cabinet meeting on Tuesday to approve the revoking of a Thai-Cambodian memorandum of understanding (MOU) on joint oil and gas exploration in an overlapping continental shelf area that was signed in June 2001 when Thaksin was prime minister.
Cambodia on Thursday appointed Thaksin, a fugitive from Thai justice, as an economic advisor, prompting Thailand to recall its ambassador to Phnom Penh in response to the diplomatic slap in the face.
Thailand has also launched a review of all bilateral agreements with Cambodia, starting with the MOU.
The Thai Ministry of Foreign Affairs said the appointment of Thaksin as an economic advisor to the government of Cambodia would "directly affect negotiations between Thailand and Cambodia under the framework of this MOU" because Thaksin was directly involved in the negotiation process.
Deputy Prime Minister Suthep Thaunsuban, meanwhile, threatened to close the Thai-Cambodian border to trade if Cambodia continued to take an aggressive stance towards the government.
But Cambodian government spokesman Phay Siphan dismissed the threat late Friday and said closing the border would be "an over-reaction" that would hurt Thai businessmen more than it would hurt Cambodians living in the area.
Phay Siphan added that Thailand should respect the contents of the agreement on oil and gas exploration.
"They should abide by their international obligations," he said. "This kind of panicked [reaction] by the Thai government - they should hold [on to] their credibility."
Thailand on Thursday said it had recalled its ambassador to Phnom Penh because the appointment of Thaksin as an economic advisor was deemed interference in its domestic affairs. The current Thai government regards ex-premier Thaksin as an archenemy, dedicated to overthrowing the administration and returning to power.
Cambodia has reciprocated by recalling its ambassador who returned to Phnom Penh Friday along with the three other senior diplomats from the embassy. Phay Siphan said Ambassador You Ay returned by road and was kept waiting for more than an hour at the border checkpoint, an action he described as "arrogant and uncivilized."
He also criticized Thailand for reviewing all bilateral agreements and cooperation projects.
"I don't think Thailand should do this, [because] the appointment of Excellency Thaksin is the internal affair of Cambodia," he said Friday. "Cambodia has no intention to worsen the relationship."
"The Cambodian government still [wants to] maintain good relations between the two kingdoms," Koy Koung said. "It's up to the Thai side. The Thai side sees this in a different way, but cooperation between the two sides should still go on."
Earlier on Friday Kasit reportedly asked Cambodia to review its decision to appoint Thaksin, saying Phnom Penh needed to choose between personal interests and relations between the two countries.
Koy Koung dismissed that. "No, the government still holds to the decision of its appointment of Mr Thaksin," he said.
The move to revoke the memorandum on joint oil and gas exploration in the Gulf of Thailand was seen as direct retaliation against Hun Sen, who has trumpeted his personal friendship with Thaksin, a billionaire former telecommunications tycoon with past business dealings in Cambodia.
However, Koy Koung said the move would make little practical difference.
"So far the progress on the boundary issues is already stuck because of the internal procedures of Thailand," he said. "It was very, very slow."
Thaksin was prime minister from 2001 to 2006 before being toppled by a coup. He faces a two-year jail sentence in Thailand for abuse of power for allowing his billionaire wife in 2003 to successfully bid on a prime plot of Bangkok land in a government auction.
Thaksin has been living in self-imposed exile, mostly in Dubai, since August 2008 but continues to be a thorn in the side of Prime Minister Abhisit Vejjajiva's government.
Thaksin was overthrown after he lost the backing of Thailand's Bangkok-based middle class and political elite. He remains popular with the poor because of his populist economic policies.
