Free Trade Agreements (FTAs) that Thailand has entered into with ASEAN member nations, as well as with China, India, Japan, South Korea, Australia and New Zealand are important toward helping drive our exports in 2010. This is because Thai exports will benefit from lower tariffs on a great number of product categories.
Aside from the benefits derived from cancellations of duties on AFTA and ASEAN-China FTA “normal track” goods, Thai exports will enjoy duty-free status per the ASEAN-India FTA, ASEAN-South Korea FTA and ASEAN-Australia-New Zealand FTA, which are scheduled to become effective this year, as well. In addition, our exports will be bolstered by improving economic conditions in those countries, especially China and India, which are expected to show robust economic growth this year, plus expansion by other ASEAN member nations, such as Indonesia and Singapore, along with recoveries Japan and New Zealand after economic recessions.
KASIKORN RESEARCH CENTER (KResearch) holds the view that India and China, plus the ASEAN members of Indonesia, Singapore and Vietnam will be promising for Thai exports, because:
1) Higher rates of economic growth are projected for them;
2) Founding ASEAN member nations and China have already cancelled tariffs on “normal track” goods, effective January 1, 2010, while India has reduced tariffs on more than 5,000 Thai products for the AIFTA, in addition to 82 categories that they had cleared in September 2006
3) Other trade privileges with other trade partners, especially with China and India.
Moderate potential is seen for exports to South Korea, Australia and New Zealand, because their economies are likely to grow moderately in 2010; South Korea has cancelled tariffs on 92.3 percent of all Thai goods eligible for tariff reductions with them, and Australia has rescinded tariffs on 96.1 percent of all Thai goods eligible for tariff reductions under the ASEAN-Australia-New Zealand FTA. However, we should be able to export more to South Korea and Australia, if we make greater use of all the tariff privileges offered by trade partners.
Meanwhile, major challenges that Thai businesses may face when exporting to FTA trade partner countries include non-tariff measures (NTMs), such as technical requirements, product standards, import regulations and other procedures that have become increasingly stringent. These NTMs may incur greater costs for Thai exporters than the tariffs previously paid to those nations. Such costs may increase further with more stringent standards and regulations imposed by them, such as costs involved in product quality assessments and testing.
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