In addition, the EU`s free trade agreement with Vietnam entered into force in 2020, reinforcing the Thai government`s urgency to reach an agreement. Like Thailand, Vietnam is strong in export-oriented production, but its low EU tariffs give it a competitive advantage in the region. Compared to other ASEAN members, especially its regional neighbors such as Singapore, Thailand lags behind and has fewer free trade agreements in place (and therefore fewer FTA trading partners). Singapore currently has about 20 free trade agreements in force and more than 31 trading partners worldwide, from America (United States, Costa Rica, Peru, Chile, Panama), Europe (EU and EFTA) via Jordan and the Gulf States (GCC) or regions. A number of issues need to be resolved if the EU and Thailand are to reach an agreement. [iii] tdri.or.th/en/tdri-insight/thai-exports-in-dire-straits-unless-govt-joins-tpp/ What has recently been discussed in Thailand among many industries and companies is the second largest free trade bloc in the world. It is estimated that the Trans-Pacific Partnership (TPP) accounts for about 40% of Thailand`s trade value. 10% of this value will come directly from the three U.S. economies: the United States, Canada and Mexico. None of these countries are currently Thailand`s FTA partners, making TPP adoption more attractive. [iii] However, as noted in all global concerns about the TPP, the Thai private sector is concerned that Thailand could potentially lose its competitiveness in terms of attracting imports and exports and investment to other TPP members, which could affect the country`s growth.
in recent years, a slow movement has already been noted. Thai exports account for a very large part of the country`s GDP (about 70% in the last 3 decades according to World Bank data, which is relatively high compared to Japan by about 15%, 20% from Australia or 45% from Germany). By focusing on change to accelerate exports, the country will unlock its full potential by increasing export earnings from key markets and new high-potential markets. These efforts will also boost Thailand`s border and regional trade with free trade agreements as a key factor in the plan to strengthen economic ties with its major trading and regional partners. Thailand has implemented bilateral trade agreements with various countries, including Australia, Chile, China, Laos, New Zealand, Japan, Peru and India. The ASEAN-China Agreement (ACFTA), which began in January 2004, has since created the world`s largest free trade area with 1.7 billion consumers with a total U.S. gross domestic product (GDP). US$2 trillion and a total trade volume (imports and exports) of approximately US$1.2 trillion. This agreement has had a very positive impact on the Thai economy. [1] Some trade and investment agreements include this mechanism, under which liberalisation measures taken by a Member State cannot be replaced by new restrictive measures. Thailand has signed 12 agreements (6 bilateral and 6 multilateral) with 9 free trade agreements currently under negotiation or management.
These agreements could have a huge impact on Thailand`s future trade and investment in the coming years. Thailand and the European Union (EU) have agreed to resume negotiations on a free trade agreement seven years after negotiations failed in 2014 following thailand`s military coup. If the two sides reach an agreement, it would be the EU`s third free trade agreement with an ASEAN member state after agreements with Singapore and Vietnam. Thailand`s simple average tariff for the most-favoured nation in 2011 was 9.8%. While the average applied tariff on agricultural products is higher than that applied to non-agricultural products, the high average tariff was levied on beverages and tobacco, clothing and fruits, vegetables and plants. Even though Thai exporters have few barriers to exporting, the country`s high import duties, levied even on small domestic production, serve as a trade barrier (Shiino, K. 2012). The country has passed a number of regional trade agreements. Among them, Thailand is a founding member of ASEAN, the world`s third largest trading bloc after the European Union (EU), which aims to be transformed into an ASEAN Economic Community (ACS) by 2015.
During the process, the original ASEAN-6 member countries, including Thailand, have eliminated almost all import tariffs, with a few exceptions, and the other ASEAN-4 countries will implement a tariff reduction by 2015. Thailand also has bilateral trade agreements with Australia, India, Japan, Laos and New Zealand. Thailand`s free trade agreements sometimes include bilateral and regional agreements at the same time. For example, trade between Australia and Thailand is governed by an agreement between the two countries, as well as a pact between Australia and New Zealand and ASEAN, of which each is a member. Thailand is also a member of ASEAN, founded in 1967. ASEAN currently consists of 10 members, including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. ASEAN has implemented a number of free trade agreements with its trading partners, including ASEAN Australia and New Zealand, ASEAN China, ASEAN India, ASEAN Japan and ASEAN Korea. In addition, the Regional Comprehensive Economic Partnership (“RCEP”), a free trade agreement between 10 ASEAN countries and their six trading partners, Australia, China, India, Korea, Japan and New Zealand, was signed in November 2020. [ii] www.doingbusiness.org/data/exploreeconomies/thailand/ thailand`s other free trade agreements still under discussion are as follows: According to the Ministry of Commerce, China (including Hong Kong) is by far Thailand`s largest trading partner with a total trade value of $79 billion in 2015, followed by Japan with $51 billion and the United States with $38 billion.
The other trading partners in the top ten are all of Thailand`s neighbors in ASEAN and Asia-Pacific: Malaysia, Singapore, Indonesia, Australia and Vietnam. [i] The military directly led the Thai government until March 2019, when a coalition of pro-military parties formed the government after elections. The EU considered that this development was sufficient to resume trade negotiations and reach an agreement on the resumption of negotiations in June 2021. With regard to technical barriers to trade, Thailand actively participates in international and regional standardization organizations such as the International Organization for Standardization, the Pacific Region Standards Congress and the ASEAN Advisory Committee on Standards and Quality. While Thailand has concluded several plurilateral mutual recognition agreements, the ASEAN Agreement on Trade in Goods by ASEAN countries requires members to apply technical regulations in a way that facilitates the implementation of ASEAN sectoral mutual recognition agreements (World Bank 2011). In addition, as a major exporter of agricultural and fishery products, sanitary and phytosanitary issues are of serious importance to Thailand. It generally follows the standards of the World Organisation for Animal Health (OIE), the Codex Alimentarius and the International Plant Protection Convention. However, it has also been reported that animal health standards are sometimes stricter than those set by the OIE. (WTO 2011). Describes the trade agreements in which this country is involved. Provides resources for U.S.
companies to obtain information on the use of these agreements. In addition to these examples, there is a specific FTA term called “Ratchet Mechanism”[1] or “automatically binds the unilateral liberalization of new services under this particular agreement.” This mechanism, if included in the FTA clause, is only a means that, in particular for trade in services and investment parties, any future changes or improvements to national laws, policies or regulations are blocked and cannot be replaced by more restrictive changes than the previous conditions. Thailand is one of the 10 members of the Association of Southeast Asian Nations (ASEAN), the region`s second largest economy in terms of GDP (17%) and the EU`s fourth largest trading partner within ASEAN. Thailand holds the ASEAN Chairmanship for 2019. In terms of international ranking for trade and investment, Thailand ranks 49th (out of 189 economies) in the World Bank`s Ease of Doing Business 2016 chart. According to the ranking and compared to last year, almost all difficulties have increased, including Thailand`s cross-border trade (which was 55 last year and 56 this year). For example, supply chains have historically identified barriers that are typically associated with facilitating trade in physical infrastructure, as well as administrative barriers and delays in Thailand`s customs and import-export processes. .