EU FTA could deliver Thai GDP boost
A free trade agreement (FTA) with the EU is likely to stimulate not only exports but imports and investment as well, helping to raise Thailand’s GDP by 1.63% a year, says a joint study by the Trade Negotiations Department and the Institute of Future Studies for Development (IFD).
Auramon Supthaweethum, director-general of the Trade Negotiations Department, said the joint study found that a Thai-EU FTA is expected to help raise exports by 3.43%, imports by 3.42% and investment by 2.74% a year.
Other economic figures such as household consumption and public welfare would benefit also, she said.
Thai products expected to reap benefits from such a pact, if implemented, include automobiles and parts, garments, electronics, chemicals, rubber, plastics, food and processed food products, machinery and parts, construction, and leather products.
Thai products likely to feel the pinch from the FTA include sugar, vegetables, fruits and beans.
According to Mrs Auramon, there are further concerns about the pact’s treatment of alcoholic drinks and medicine and plant varieties.
“The study also suggests that the revival of the talks which were suspended five years ago will help expand the market for Thai products amid global economic uncertainties affected by the trade protectionist barriers introduced by several trading partners of Thailand and raise competitiveness in the EU market after the bloc has already signed FTAs with Singapore, Vietnam and Brazil,” she said.
But she warned that given the requirements for relatively high standards in terms of market access not only for products but also for services and investment and other issues such as e-commerce, fair trade competition, intellectual property protection and state procurement under the pact, Thailand must get ready for the talks and carefully prepare remedy measures for the affected sectors.
FTA negotiations between Thailand and the EU were put on hold after the 2014 coup and subsequent military rule. The EU protested the suspension of democracy.
Thailand held general elections in March, and a pro-army coalition of parties formed a government, officially ending five years of military rule.
The Commerce Ministry through the Trade Negotiations Department has been speeding up studies of the opportunities and challenges in reviving long-delayed trade talks between Thailand and the EU after the EU Council made a statement that the bloc aimed to resume FTA negotiations with Thailand.
The department has organised public hearings nationwide during September and November this year.
The study will soon be disseminated via the department’s website and proposed to the international trade policy committee and the cabinet, according to the trade negotiators’ chief.
The EU is Thailand’s fourth-largest trading partner in the world and the No.4 investor here.
Bilateral trade between Thailand and the EU totalled US$47.3 billion in 2018, accounting for 9.4% of Thailand’s trade with the global market. The figure was up 6.5% from the year before.
Of the total, exports accounted for $25.06 billion, up 5.3% from 2017, and imports were $22.27 billion, up 9% from the previous year.
Key export products were computers and parts, automobiles and parts, gems and jewellery, electrical circuits, and air-conditioners and parts, while key imports were machinery and parts, aircraft, gliders, avionic equipment, electrical machines and parts, chemicals, and medicine.