EU and Thailand launch negotiations for Free Trade AgreementON MARCH 7, 2013
On 6 March 2013, European Commission President, José Manuel Barroso, and the Thai Prime Minister, Yingluck Shinawatra, launched negotiations for a Free Trade Agreement (FTA) between the European Union and Thailand. EU Trade Commissioner De Gucht and the Thai Minister of Commerce Boonsong had met the day before to formally agree on the start of negotiations. The ambition is to conclude a comprehensive agreement covering tariffs, non-tariff barriers and other trade related issues, such as services, investment, procurement, regulatory issues, competition, and sustainable development.
The launch of FTA negotiations marks an important step in EU-Thai relations, already strengthened by a Partnership and Cooperation Agreement. The first negotiating round is expected to take place before the summer break.
Thailand is the EU’s third largest trading partner inside ASEAN and the EU is Thailand’s third largest trading partner, trade between them in 2012 reaching nearly €32 billion. The EU is also one of the largest investors in Thailand with investment stocks worth over €14 billion in 2011. The FTA with Thailand should deliver substantial economic gains and put the EU on par with partners who have already concluded FTAs with Thailand (China, India, Japan, Korea, Australia and New Zealand).
EU-ASEAN Trade Relations
Thailand is the latest in a series of ASEAN countries to negotiate an FTA with the EU. At the end of 2012, the EU successfully concluded negotiations with Singapore (IP/12/1380) and has been negotiating with Malaysia and Vietnam since 2010 and 2012 respectively (IP/12/689).
The EU began its policy of sealing bilateral deals with individual ASEAN countries in December 2009 when EU Member States gave the green light for the European Commission to push for FTAs. While pursuing this bilateral approach, the EU’s ultimate goal is an agreement with ASEAN as a whole, one of the most dynamic regions in the world.
The Association of Southeast Asian Nations (ASEAN) has ten member countries: Brunei Darussalam, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam. As a whole, in 2011 ASEAN was the EU’s fifth largest trading partner with €212.8 billion of trade in goods and services. The EU is ASEAN’s third largest trading partner after China and Japan, accounting for around 10.5% of the bloc’s trade. The EU is by far the largest investor in ASEAN countries accounting for an average of 17.1% FDI during the period 2009-2011.
EU-Thailand Trade Relations
Thailand is one of the 10 members of the Association of South East Asian Nations (ASEAN). The ASEAN countries together are the EU’s third largest trading partner outside Europe with annual bilateral trade in goods and services of some €213 billion.
Thailand is the EU’s third largest trading partner inside ASEAN (and 24th of the EU’s total trade). Conversely, the European Union is Thailand’s third largest trading partner (after Japan and China).
Trade figures for 2012 (goods):
EU exports to Thailand: €14.8 billion
EU imports from Thailand: €16.9 billion
Total trade in goods: €31.7 billion
EU exports are dominated by high tech products including machinery and electrical appliances, pharmaceutical products, vehicles, precious metals and optical instruments. Thailand’s key export items include machinery and electrical appliances, foodstuffs, plastics/rubber, vehicles and precious metals/pearls.
The EU is one of the largest foreign investors in Thailand with investment stocks worth €14.07 billion in 2011.