Cabinet gives green light for Thailand to seek BRICS membership
The Cabinet has approved Thailand's participation in the BRICS group to enhance the country’ role as a leading player among developing countries and to increase its involvement in shaping international economic policy.
The BRICS group, consisting of major emerging market countries — Brazil, Russia, India, China, and South Africa — welcomed five new members on January 1: Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates.
The BRICS group aims to expand cooperation with non-member countries and plans to invite non-member countries to participate in its mechanisms at the 16th BRICS Summit in Kazan, Russia, from October 22-24. This expansion is part of the BRICS-Plus initiative, with 22 countries, including Thailand, having applied for membership.
The significance of the BRICS group lies in both international politics and trade. The founding members of BRICS are countries with large economies, particularly economic powerhouses like China and India. In terms of economic and trade aspects, the BRICS group's economy is valued at over $28.5 trillion, accounting for approximately 28% of the global economy. Notably, BRICS member countries also produce about 44% of the world's crude oil supply.
As Thailand prepares to submit its letter of intent to join the BRICS group later this year, this decision is being made more swiftly compared to its prolonged consideration of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which has yet to be finalised. What benefits will Thailand gain from becoming a member of the BRICS group?
In terms of trade in 2024, Thailand's exports to the founding BRICS countries, which are its main trading partners, were:
China: Thailand exported goods worth $34.164 billion, a year-on-year (YoY) decline of 8%.
Russia: Exports amounted to $844 million, showing an expansion of 38.7% (YoY).
India: Exports were valued at $10.118 billion, down 3.9% (YoY).
South Africa: Exports reached $3.539 billion, up 25.4% (YoY).
Chaichan Charoensuk, chairman of the Thai National Shippers' Council (TNSC), backed Thailand’s decision to join the BRICS group. He noted that BRICS is a group of emerging economies, including countries in Asia, South Asia, and Africa, which presents an opportunity for Thailand to increase its exports. China and India, in particular, are countries with large economies. The BRICS group accounts for approximately 18% of Thailand's exports.
An interesting point is that Brazil will become an important new market for Thailand, with highlighted products being automotive parts and car tyres.
Exports to Russia will include car tyres as well.
As for India, the main exports will be plastic pellets and chemicals. This market is expected to absorb these products as Thailand's exports to China have decreased due to trade war issues and China's reduction in import dependence. Having India as a new market to compensate is appropriate, Chaichan said.
South Africa will import automotive parts and rice. This market will help support Thailand's export of these products.
"We will gain more trade benefits from the BRICS group. However, regarding the political conflicts among some countries, Thailand maintains a neutral policy and does not get involved in political matters. We focus on finding new markets to replace the old ones," said Chaichan.
The swift decision of the government to join the BRICS group compared to other economic blocs like the CPTPP is attributed to perceived vulnerabilities and unresolved issues within the latter.
BRICS, however, is seen as a group of countries that import goods aligned with Thailand's strengths, such as food, plastic pellets, chemicals, and automotive parts, with fewer restrictions compared to the CPTPP. This is considered a win-win situation for both sides. Any vulnerabilities or non-tariff measures will need to be addressed, Chaichan said.
Towards the end of the year, during the BRICS group meetings, Thailand became the first ASEAN nation to express interest in joining officially. Upon becoming a member, Thailand's trade benefits within BRICS are expected to increase significantly, not only through access to new markets but also through enhanced cooperation and collaboration.
