Regarding the 33rd Asia-Pacific Economic Cooperation (APEC) summit hosted by Thailand, the French leader was officially invited as a special guest of the Thai government to attend the forum. During his visit to Thailand, marking the first such visit in 16 years, French President Emmanuel Macron and the Prime Minister of Thailand held discussions and reaffirmed their support for bilateral relations, economic partnership and efforts to advance the EU-Thailand Free Trade Agreement (FTA). The roadmap for Thai-French relations is considered a key step for further development of relations between the European Union (EU) and ASEAN, accordingly. KResearch holds views on fostering cooperation with France in the following issues:
1. Investment: The EU, with similar potential as Asia and the US, is the ASEAN’s top fourth investment partner. Thanks to strong relations at present, all sectors should accelerate investment from France and the EU. This would be a key effort for Thailand to integrate manufacturing production into the EU value chain, on par with ASEAN competitors. Average foreign direct investment (FDI) inflows from the EU to ASEAN during 2017-2018 amounted to USD 17.595 billion (total FDI inflow into ASEAN was USD 154.410 billion). Meanwhile, FDI inflows from France to Thailand have been mainly for the technology product industry. New FDI inflows going forward would significantly support manufacturing connectivity between Thailand and Europe. Presently, there are about 280 French companies in the technology sector here , for instance those engaged in production of tires, automotive parts and industrial products. During the first nine months of 2022, the Thailand Board of Investment (BOI) approved 11 projects applied for investment promotion by French investors, with investment value of THB 1,490 million (out of the total amount of THB 223.746 billion approved for BOI promotion).
2. Trading: Stronger ties with Thailand would bolster French trade opportunities in the region, although Germany is currently the European nation having the strongest relationship with ASEAN, holding a share of 2 percent of the total ASEAN trade value, followed by the Netherlands at 1.4 percent. Meanwhile, France recorded a trade share of only 1 percent, but still enjoys opportunities for market expansion as French products – such as cosmetics, perfumes, bags, airplanes, aviation equipment and pharmaceuticals – are unique and can meet growing demand among ASEAN countries. Meanwhile, ASEAN’s electronic products can support production in France as well. As for Thailand, France is its third-largest trading partner among the EU members, after Germany and the Netherlands. Thailand has a trade deficit with France, as Thailand’s imports from France are mainly high value-added items and luxury goods. Meanwhile, Thai exports to France are quite small in volume; the products include air conditioners, lenses, natural rubber and aircraft parts.
KResearch views that amid the highly uncertain global economy and geopolitical tensions, increased bilateral relations between Thailand and France would open up trade and investment opportunities in new dimensions. France’s strengths lie in electric vehicles, aerospace, transportation technology, renewable energy production and advanced electronics, which are in alignment with Thailand’s target industries that are trying to enhance their competitiveness. This requires ongoing public and private sector collaboration. Meanwhile, promotion of ASEAN-EU FTAs, including Thailand-EU pact, still needs more collaborative efforts from many other member economies.