Thai-European Union agreement to accelerate FTA with member states

The Thailand-European Union (EU) Partnership and Cooperation Agreement (PCA) will benefit the Thai economy, cybersecurity and sustainability, according to several experts who participated in a roundtable discussion on October 18.

Titled “The new era of Thailand-EU relationship: What will Thailand get under the PCA?”, the roundtable was organised by the Foreign Ministry and Nation Group.

Thailand and the EU have been negotiating the PCA over the past 20 years, with the first discussions taking place in 2004, Krongkanit Rakcharoen, director-general of the ministry’s Department of European Affairs, said, explaining that the agreement was increasingly crucial in the light of geopolitical conflicts, which made it difficult for Thailand to strengthen international relationships.

The agreement will offer opportunities for Thailand across various dimensions such as security, economy, trade and investment, technology and environment.

She noted that the EU has supported Thailand on many issues, including its bid to become a member of United Nations’ Human Rights Council for 2025-2027, its application to join the Organisation for Economic Co-operation and Development, and in promoting social diversity.

Krongkanit explained that Thai-EU PCA would play an important role in free trade agreement (FTA) talks, digital economic development, cybersecurity, competitiveness in trade and investment, education and science, and adoption of green technology while also facilitating talks on complex issues like the free Schengen visa scheme.

“PCA is an agreement that will benefit all Thais,” she stressed.

Natthanan Kunnamas, director of Chulalongkorn University’s Centre for European Studies, agreed, saying that the Thai-EU PCA would help promote Thailand on the global stage and enable the country to cope with risks on trade and investment.

“The Thai EU PCA will offer alternatives for Thailand on policy hedging amid the competition between the US and China, as well as diversify risks,” she said.

Natthanan said the agreement would benefit the government’s policy to maintain relationships with all countries, adding that it would enable Thailand to negotiate with the EU equally.

Important for future talks

Chotima Iemsawasdikul, director-general of the Department of Trade Negotiations (DTN), confirmed that Thai-EU PCA is crucial to facilitate FTA talks, saying that many countries that have FDAs with EU also have a PCA.

The PCA stipulates that both parties should prepare data on standards, regulations, approval process and technical potential for lifting trade barriers, she explained.

She said the agreement would support Thailand’s sustainable economy in terms of food manufacturing, personal data protection, international equality, digital trade, intellectual property and green transition.

The EU is considered an important trade partner with US$41 billion (1.35 trillion baht) in trade value, she added.

“The Thai-EU PCA will benefit not only promote economic collaboration between Europe and Thailand, but support Thailand to maximise FTAs under negotiation,” Paranee Adulyapichet, president of the European Association for Business and Commerce, explained, adding that the agreement would draw European investment to Thailand and that Thai entrepreneurs would be allowed to export products to EU countries, especially automotive components, industrial and agricultural products.

The agreement can be used to identify and tackle issues on Thailand’s export, digital and energy transition, transportation, healthcare and labour skills, so Thailand can meet the EU’s requirements and draw investment to the country, she said.

Industrial challenges

Nilsuwan Leelarasamee, vice president of the Federation of Thai Industries (FTI), pointed out that the Thai-EU PCA posed a challenge to the Thai industrial sector.

Many years ago, the EU launched the International Organisation for Standardisation (ISO) 9000, which dealt with quality standards and initially, at least, posed a challenge to Thailand. However, Thailand had quickly adapted to ISO 9000 in a bid to export products worldwide.

To meet the Thai-EU PCA standard, he urged relevant agencies to collaborate so as to better cope with such global challenges as future pandemics, disruptive technology, trade wars, geopolitics, global boiling and cyberattacks.

“This time, Thailand has to accelerate many things to meet PCA standards in terms of knowledge, technology, science and advancement to keep up with the EU,” he said, adding that this effort could enable the Thai industrial sector to receive recognition from many countries.

Nilsuwan went on to say that FTIs enhance the Thai industrial sector to cope with EU practices including the Carbon Border Adjustment Mechanism (CBAM), the EU Deforestation Regulation (EUDR), the Corporate Sustainability Due Diligence Directive (CSDD), and “farm to fork” (F2F).

The Thai industrial sector needs capacity building, trade facilitation, technology adoption, and implementation of strategies for food and products to match up to these practices, he added.

Tackling climate challenges

Wantanee Lalee, director of the Department of Climate Change and Environment’s International Convention and Cooperation Section, said Thailand had much to do in terms of environment preservation, biodiversity, and sustainable development to meet Thai-EU requirements.

She confirmed that the agreement offers an opportunity for knowledge exchange and collaboration on the green transition between two parties, but said Thailand should work on renewable energy and climate change mitigation as well.

“We should implement policies and targets for Thailand to achieve the goal,” she said, adding that Thai entrepreneurs’ collaboration on carbon footprint and data management is crucial to boost competitiveness in meeting CBAM.

Wantanee added that the department is considering the draft act on climate change to be proposed to the National Environment Board and the Cabinet, respectively.