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15 Nov 2019


Unlocking of Thai-Myanmar land transport bottleneck, border trade is set to turn around in 2020 (Current Issue No.3055)


​​          The latest development at the Thailand-Myanmar border this year is very interesting with the opening of the second Thai-Myanmar Friendship Bridge at the Mae Sot checkpoint in Tak on October 31, 2019. The new bridge was built to ease traffic congestion at the first friendship bridge. Moreover, the authorities have planned to extend the business hours to facilitate the transport activities there. Additionally, the Initial Implementation of Cross-Border Transport Facilitation Agreement (IICBTA) for countries in the Greater Mekong Subregion (GMS) and its addendum, that Myanmar commenced the agreement with Thailand on October 22, 2019, will facilitate transport at the Myawaddy-Mae Sot checkpoint in Tak. Authorized vehicles from each side will be able to cross the border and be granted a permit to stay in the other country for 30 days. Therefore, cargo trucks from Myanmar can cross the Mae Sot checkpoint to two destinations, namely, Laem Chabang Port, Chon Buri, and the border province of Mukdahan. At the same time, vehicles from Thailand can carry goods from the Mae Sot checkpoint all the way to the Thilawa Special Economic Zone (SEZ) in Yangon (extended from Myawaddy originally). This will help Thai companies save time and transport costs and facilitate exports via cross-border trade.

           Regarding the opportunity of Thai products from the said development, KResearch views that currently, Thailand has gained a comparative advantage in the Myanmar market. Popular Thai products in terms of export potential and the shift toward investment in lieu of exports remain the traditional items in the food and beverages segment, consumer goods for daily consumption, motorcycles and some electrical appliances. Other products with export prospects in spite of competition in Myanmar are medicines, baby foods and processed foods. Meanwhile, Thailand's intermediate goods should be a rising star, which still leave their competitors, namely, China, far behind are construction materials, packaging, plastic resins (ethylene), paper, automotive components, vehicle tires, glass bottles and plastic bags, etc.

           ​ The recent flow of investment in Myanmar has continuously reduced demand for Thai goods via the Thai-Myanmar border trade since 2017. During the first nine months of 2019, the export value totaled 68 billion Baht, a contraction of 3.9 percent YoY. The whole year's figure is expected to be around 102 billion Baht, contracting around 3.0 percent, in 2019. Transport facilitation at the Thailand and Myanmar border at Mae Sot in Tak will help save time and transportation costs for Thai businesses and further drive cross-border exports in the future. In particular, Thailand's new intermediary merchandise will become a rising star in accordance with an expansion of the manufacturing sector in Myanmar. KResearch forecasts that, due to the reasons stated above, Thai exports via Mae Sot checkpoint in Tak will increase to nearly 80 billion Baht in 2020, up around 14 percent. It will propel the exports via the Thai-Myanmar border in 2020 to reach 105 billion-110 billion Baht, up 3.0-8.0 percent.  In 2021, the border trade via Mae Sot in Tak is expected to reach 100 billion Baht.

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