In addition to these examples, there is a specific FTA term called “Ratchet Mechanism”[1] or “automatically binds the unilateral liberalization of new services under this particular agreement.” This mechanism, if included in the FTA clause, is only a means that, in particular for trade in services and investment parties, any future changes or improvements to national laws, policies or regulations are blocked and cannot be replaced by more restrictive changes than the previous conditions. Thus, this mechanism aims to ensure that measures provided for by national laws become increasingly advantageous in terms of requirements for technical barriers to trade, Thailand actively participates in international and regional standardization organizations such as the International Organization for Standardization, the Pacific Region Standards Congress and the ASEAN Advisory Committee on Standards and Quality. While Thailand has concluded several plurilateral mutual recognition agreements, the ASEAN Agreement on Trade in Goods by ASEAN countries requires members to apply technical regulations in a way that facilitates the implementation of ASEAN sectoral mutual recognition agreements (World Bank 2011). In addition, as a major exporter of agricultural and fishery products, sanitary and phytosanitary issues are of serious importance to Thailand. It generally follows the standards of the World Organisation for Animal Health (OIE), the Codex Alimentarius and the International Plant Protection Convention. However, it has also been reported that animal health standards are sometimes stricter than those set by the OIE. (WTO 2011). In addition, Thailand is considering joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Thailand has formed a committee to examine the impact of such a trade pact. [ii] www.doingbusiness.org/data/exploreeconomies/thailand/ [1] Some trade and investment agreements contain this mechanism whereby liberalisation measures taken by a Member State cannot be replaced by new restrictive measures. In terms of international ranking for trade and investment, Thailand ranks 49th (out of 189 economies) in the World Bank`s Ease of Doing Business 2016 chart. According to the ranking and compared to last year, almost all difficulties have increased, including Thailand`s cross-border trade (which was 55 last year and 56 this year).
For example, supply chains have historically identified barriers that are typically associated with facilitating trade in physical infrastructure, as well as administrative barriers and delays in Thailand`s customs and import-export processes. This delay was most common in terms of transporting standard goods from the factory gate to the port, and then the additional process with administrative and port requirements until the cargo was loaded onto a ship. [ii] Thailand continues to address concerns about trade facilitation and is continuously looking for ways to improve the processes of transporting goods to and from the country. According to the Commerce Department, China (including Hong Kong) is by far Thailand`s largest trading partner with a total trade value of $79 billion in 2015, followed by Japan with $51 billion and the United States with $38 billion. The other trading partners in the top ten are all of Thailand`s neighbors in ASEAN and Asia-Pacific: Malaysia, Singapore, Indonesia, Australia and Vietnam. [i] Thailand`s simple average most-favoured-nation duty in 2011 was 9.8%. While the average applied tariff on agricultural products is higher than that applied to non-agricultural products, the high average tariff was levied on beverages and tobacco, clothing and fruits, vegetables and plants. Even though Thai exporters have few barriers to exporting, the country`s high import duties, which are levied even on small domestic production, serve as a barrier to trade (Shiino, K.
2012). The country has implemented a number of regional trade agreements. Among them, Thailand is a founding member of ASEAN, the world`s third largest trading bloc after the European Union (EU), which aims to be transformed into an ASEAN Economic Community (ACS) by 2015. During the process, the original ASEAN-6 member countries, including Thailand, have eliminated almost all import tariffs, with a few exceptions, and the other ASEAN-4 countries will implement a tariff reduction by 2015. Thailand also has bilateral trade agreements with Australia, India, Japan, Laos and New Zealand. Thailand`s free trade agreements sometimes include bilateral and regional agreements at the same time. For example, trade between Australia and Thailand is governed by an agreement between the two countries, as well as a pact between Australia and New Zealand and ASEAN, of which each is a member. Other Thailand free trade agreements still under discussion include: Learn how Thomson Reuters solutions can simplify your entire global trade management process. The ASEAN-China Agreement (ACFTA), which began in January 2004, has since created the world`s largest free trade area with 1.7 billion consumers with a total domestic product (GDP) of about US$2 trillion and a total trade volume (imports and exports) of about US$1.2 trillion. This agreement has had a very positive impact on the Thai economy.
The Kingdom of Thailand is classified as a middle-income country in Southeast Asia. The country ranked 57th out of 132 in the World Economic Forum`s (WEF) Enabling Trade Index (2012), which measures institutions, policies and services to facilitate trade in countries. Despite the financial crisis, natural disasters and political unrest, the country has maintained a resilient and open economy, especially as a member of the Association of Southeast Asian Nations (ASEAN). The efficiency of the country`s import-export procedures and its attractive characteristic for foreign investors are a competitive advantage, while the country has always imposed high import duties and restricted market entry. The country`s national strategy aims to strengthen competitiveness in international markets by increasing productivity and preparing for regional economic integration (WEF 2012). Thailand has signed 12 agreements (6 bilateral and 6 multilateral) of which 9 are under negotiation or management. .