Thailand to sign historic free trade agreement with EFTA in Davos
Commerce minister expects 3% boost to country’s GDP growth
Thailand is poised to sign a landmark Free Trade Agreement (FTA) with the European Free Trade Association (EFTA) next week at the World Economic Forum in Davos, Switzerland.
Commerce Minister Pichai Naripthaphan announced that the signing ceremony would take place on January 23, after which it would be placed before the Thai Parliament for ratification, a process expected to take approximately one year.
"This FTA marks a significant milestone for Thailand, opening new avenues for trade and investment," said Pichai. "We anticipate that this agreement will boost Thailand's GDP by more than 3% by increasing foreign investment and exports."
The Thailand-EFTA FTA covers a wide range of areas, including market access for goods and services, investment, intellectual property rights, competition policy, government procurement, and sustainable development.
"We are confident that this FTA will not have any negative impact on Thailand and will provide significant benefits to our economy," Pichai assured.
The EFTA currently has four member countries: Iceland, Liechtenstein, Norway and Switzerland. They have developed one of the largest networks of FTAs, spanning over 60 countries and territories, including the EU.
The Thailand-EFTA deal is expected to pave the way for the expedited conclusion of the Thailand-EU FTA negotiations, as both agreements will share a common foundation.
In 2023, the EFTA region was Thailand's 16th largest trading partner, with total trade valued at US$9.89 billion. Thailand exported $4.39 billion worth of goods to EFTA while importing $5.49 billion, resulting in a trade deficit of $1.10 billion.
In the first 11 months of 2024, trade with the EFTA increased to $11.47 billion, representing 2.06% of Thailand's total global trade. However, the trade deficit widened to $3.22 billion, with exports reaching $4.12 billion and imports reaching $7.34 billion.
Key Thai exports to EFTA: Gems and jewellery, watches and components, iron, steel and products, canned and processed seafood, and travel goods
Key imports from EFTA: Machinery, watches and components, meat for consumption, medical and pharmaceutical products, and fertilizers and pesticides
The Thai government has approved in principle the establishment of an FTA Fund to support sectors and individuals potentially impacted by trade liberalization. The Ministry of Commerce is currently drafting the necessary legislation for Cabinet approval.
