Thailand revives FTA negotiations with the European Union, aims to reach agreement by 2025

    Thailand, along with the 27 European Union countries, has officially announced the commencement of negotiations for the establishment of a Free Trade Area (FTA) between Thailand and the European Union (Thai-EU). These negotiations follow a pause that has lasted over 10 years. It is expected that the first negotiation meeting will begin in July 2023, and the goal is to conclude the negotiations within two years, or by 2025, covering issues of trade in goods, services, and investment between the two sides.

If the Thai-EU FTA negotiations reach an agreement, Thailand stands to benefit as follows:

1. Once implemented, export taxes for Thai goods to the 27 European Union countries will be zero, creating price competitiveness and an advantage over countries that do not have an FTA with the EU. This is especially applicable for industries such as automotive and components, various electronics, clothing and textiles, food, rubber, chemicals, and plastics.
2. In the service sector, Thailand will enjoy special privileges in several areas of expertise, such as wholesale and retail, food production, and tourism.
3. Import taxes on raw materials will be eliminated, helping to reduce production costs in Thailand, particularly for the import of machinery, equipment, and chemicals.
4. There will be mutual investment exchanges between the two parties, allowing Thailand to benefit from the transfer of technology and innovation.
5. It will play a crucial role in attracting investors from around the world to invest in Thailand, increasing investment value and contributing to the country's GDP.
6. Thailand's number of FTAs will increase from the current 14 agreements with 18 countries to 15 agreements with 45 countries immediately upon implementation. This would make Thailand the third ASEAN country, after Vietnam and Singapore, to have an FTA with the 27 EU countries.

     The European Union's 27 countries have a combined population of about 500,000,000 people and are Thailand's 4th largest trading partner, accounting for 7% of Thailand's total global trade value.

Source: Department of Trade Negotiations, Ministry of Commerce
Tel. +66 2507 7572

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