Free Trade Agreement In Thailand

What has recently been discussed in Thailand in many sectors and companies is the second largest free trade bloc in the world. The Trans-Pacific Partnership (TPP) agreement is expected to account for about 40% of Thailand`s trade value. Ten percent of this value will come directly from the three U.S. economies: the United States, Canada and Mexico. None of these countries are currently partners in the free trade agreement with the Thai Free Trade Agreement, making the adoption of the TPP more attractive. (iii) However, as has been noted worldwide, Thailand`s private sector is concerned that Thailand may lose its competitiveness in terms of import, export and investment attractiveness to other current members of the TPP, which could adversely affect the country`s growth; already noted in recent years in the slow movement. [i] Trade statistics, Ministry of Trade Negotiations: [1] Some trade and investment agreements include this mechanism, under which not all liberalisation measures decided by a Member State can be replaced by new, more restrictive measures. At the regional level, Thailand is a member of ASEAN and is therefore part of the bloc`s free trade agreements with China, Korea, India, Australia and New Zealand and the EU. He is also a member of BIMSTEC and was at least the protagonist under Thaksin, who worked for greater integration of trade and investment in the Mekong region under ACMECS, a framework for cooperation between Burma, Cambodia, Laos, Thailand and Vietnam.

Thailand has signed 12 agreements (6 bilateral and 6 multilateral agreements) with 9 free trade agreements under negotiation or in the process of being implemented. These agreements could have a huge impact on Thailand`s trade and investment in the years to come. In addition to these examples, there is a specific FTA term called the “Ratchet Mechanism”[1] or “Unilateral liberalisation of new services automatically engages within the framework of this specific agreement.” This mechanism, if included in the free trade clause, is only one way to prevent, particularly for trade in services and investment parties, from modifying or improving national legislation, directives or regulations and not being replaced by more restrictive amendments than previous conditions. In addition, exporters must be able to accurately specify their product nomenclatures and understand their trade flows. This was a difficult undertaking for Thai companies, as experienced when they were modified the new version (2012) of Thailand`s HS code. Thai Customs asked the exporter (and importer) to indicate the classification of the goods under the new version, which was sometimes different from the previous version. During this period and according to the rules, country of origin (C/O) forms still required the old version of the HS code (2007), which had different references in the customs declaration. The obligation for Thai companies was to meet the requirements of a 2012 tariff change with outdated documentation of 5 years. As the process was difficult, some exporters did not wait for the C/O to be issued on time and skipped the process. Free trade agreements not only reduce import duties and eliminate tariffs on trade in goods, they are also an important catalyst for long-term investment and growth in participating countries.