Thailand and EU resume free trade agreement negotiations
Illinois News Today - 08 August 2021
Thailand and EU resume free trade agreement negotiations
Thailand and the European Union (EU) have agreed to resume negotiations on a free trade agreement (FTA) seven years after the collapse of negotiations in 2014 after a military coup in Thailand.
If both parties conclude an agreement, it marks the EU’s third FTA with ASEAN member states, following the agreement with. Singapore When Vietnam..
FTAs will facilitate EU access to trade and investment in Southeast Asia’s second-largest economy, and Thai exporters will benefit from lower tariffs. Still, while FTA momentum is recovering, the EU and Thai governments need to resolve some open issues in order to reach an agreement.
Many EU companies have Southeast Asian production in Thailand. This is because it is located in that region and is the second largest economy in ASEAN after Indonesia. Establishing an FTA will ease trade and investment barriers for EU companies and make Thailand an even more attractive regional base.
Why did the FTA negotiations collapse?
The EU and Thailand started FTA negotiations in 2013. The EU sought to strengthen ties with ASEAN’s second-largest economy, but the Thai government motivated it to mitigate the effects of losing access to trade aid under the EU’s Generalized System of Preferences (GSP) scheme. It was attached.
The GSP scheme is an EU development program that provides low or zero tariffs to developing countries. Thailand became too wealthy to qualify for the GSP system and was disqualified in early 2015.
2014, Thai Army Take control The coup’s collapse of the government and the suspension of the Constitution disrupted relations with the EU and suspended trade negotiations.
However, in December 2017, the EU Foreign Council Decided Pursue gradual re-engagement with Thailand. The decision said the EU could explore the possibility of resuming FTA negotiations subject to Thailand, which has a democratically elected civilian government under the new constitution.
The military directly operated the Thai government until March 2019, when the party’s pro-army coalition established the government after the election. The EU believed that this progress was sufficient to resume trade negotiations and agreed to resume negotiations in June 2021.
Trade negotiations in 2022 Joint understanding document As a framework that covers issues such as trade in goods, services, investment, intellectual property, e-commerce, and government procurement.
What problem do you need to solve?
There are many issues that the EU and Thailand need to resolve in order to reach an agreement.
Problems in EU negotiations include relatively high taxes on Thai alcohol, uncertain government procurement procedures, and industry-specific market access concerns. EU too I’m reluctant Expand market access to Thai agricultural and fishery products.
In the case of Thailand, concerns about FTAs are primarily related to the need to meet higher EU regulatory standards and remove non-tariff barriers. Issues that need to be resolved include, among other things, labor and environmental standards, and intellectual property.For example, EU stakeholders Criticized Labor abuse in Thailand, including the treatment of migrant workers.
The Thai government also opened the country’s financial sector, and Potential impact Tighter intellectual property enforcement could give the country’s booming healthcare industry.
Who will benefit from the EU-Thailand FTA?
The EU is Thailand’s fifth largest trading partner after ASEAN, China, Japan and the United States, accounting for about 7.5% of the country’s total trade.Meanwhile, Thailand is EU 26NS Largest trading partner, and 17NS Largest as an imported product.
The total amount of bilateral trade in 2020 will be 29.1 billion euros (US $ 34.5 billion), and the EU will import products worth 17.7 billion euros (US $ 21 billion) from Thailand and export € 11.4 billion (US $ 13.5 billion). did. This represents a 10% decline in imports and a 15.8% decline in exports as the COVID-19 pandemic disrupted the global economy.
The EU’s largest import category from Thailand is machinery and appliances, which will account for 52.3% of total imports in 2020.
Under the FTA, mechanical and electrical appliances, electronics, and automotive manufacturing will be the winners. In addition, exporters who thrive with access to GSP will benefit from food and beverages, pearls and rare stones, apparel and more.
In addition, EU FTAs with Vietnam Effective By 2020, the urgency of the Thai government’s agreement is increasing. Like Thailand, Vietnam is strong in export-led manufacturing, but has a competitive advantage in the region due to low EU tariffs.
Of all European countries in 2019, including non-EU countries, Switzerland has the largest share of imports from Thailand (16.9%), Germany (15.6%), the Netherlands (13.2%) and the United Kingdom (11.4%). %), And France (7.5%).
Reflecting EU imports from Thailand, machinery and appliances is the largest export category of blocks to Thailand, accounting for 36% of the total by 2020. Products in the chemical or related industries are the second largest category in the EU, with total exports.
The EU is Thailand’s largest foreign investor after Japan and the largest foreign investor in ASEAN as a whole. In 2020, the EU will be worth 19.8 billion euros (US $ 23.5 billion) Outward stock in Thailand.
FTAs also benefit EU-based exporters in industries such as machinery and appliances, apparel, food and beverages.
In 2019, Germany was Europe’s largest exporter to Thailand. This is because Germany accounted for 26% of the region’s exports. Next were Switzerland (10.5%), France (9.1%), the United Kingdom (8.8%) and Italy (8.7%).
In addition to Thailand, the EU has been conducting trade negotiations with Indonesia, the Philippines and Malaysia in recent years. Mixing result.. Nevertheless, following a successful deal with Vietnam, the negotiations reflect a coordinated EU effort to strengthen economic relations with Southeast Asia.
