Thailand and EU hail progress on FTA talks
Free trade agreement with world’s second-largest economy expected by year-end, boosting Thai GDP by up to 1.63%
The European Union and Thailand hailed significant progress in their Free Trade Agreement (FTA) negotiations on Monday, with two chapters – on regulatory practices and transparency – already finalised.
Prime Minister Paetongtarn Shinawatra said Thailand expects to sign the FTA before the end of this year.
Thai trade representative Nalinee Taveesin hosted Renita Bhaskar, head of trade and economic affairs at the EU delegation to Thailand, at Government House, highlighting their growing trade and investment relationship via frameworks like the recently concluded Partnership and Cooperation Agreement (PCA), the first bilateral agreement between the two parties.
Nalinee said she hoped for a swift conclusion to the FTA talks, emphasising the European Union was a crucial market for Thailand as the world’s second-largest economy with high purchasing power.
The talks also covered cooperation on workforce development, focusing on vocational education to prepare Thailand for high-tech investment opportunities.
Technical support for environmental initiatives, especially regarding the EU's Carbon Border Adjustment Mechanism (CBAM), and Thailand's aspirations to join the Organisation for Economic Co-operation and Development (OECD) were also discussed.
The EU is Thailand's fourth-largest trading partner after China, the US and Japan, with bilateral trade reaching $43.5 billion last year, accounting for 7.17% of Thailand’s total trade volume.
The FTA will enhance Thailand's competitiveness in the European market, after the country lost its Generalised Scheme of Preferences (GSP) privileges with the EU in 2015.
This puts Thailand at a disadvantage compared to regional neighbours like Indonesia and the Philippines, which still enjoy EU GSP privileges, while Vietnam and Singapore have already secured FTAs with the European bloc.
Thai officials believe the FTA will not only expand trade and investment opportunities but also attract foreign investment and encourage Thailand to align its regulatory standards with international practices.
Thailand the EU have held four rounds of FTA talks since 2023, after discussions were suspended under the coup government of Prayut Chan-o-cha.
The Thai Department of Trade Negotiations estimates the FTA will boost Thailand’s GDP by up to 1.63%, raise annual exports by as much as 3.43 % per year, and increase investment by 2.74% per year.
