The Thai Parliament recently ratified the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade bloc. The RCEP includes the 10 members of ASEAN, plus China, Japan, South Korea, Australia, and New Zealand, combining one-third of the global GDP.
The RCEP is Thailand’s 14th free trade agreement (FTA) and further promotes Thai exports. Specifically, the country will be able to export the majority of its products (90-92% of tariff lines) to the other 14 member countries without tariff constraints as the member countries will gradually reduce tariff rates to 0%. Businesses working in Thailand’s import-export sector, especially those in agricultural produce, food, electrical appliances, retail services, health-related services, and even the biochemicals sectors, will significantly benefit from the pact.
Thailand’s trade ended in 2020 on a strong note, with the value of Thai exports in December 2020 expanding by a higher-than-expected rate of 4.7% over the previous month. Among the key export drivers, electronics staged a strong rebound by 15.9% YoY.
The overall export performance for 2020 was minus 6%, which is better than the expected figure between minus 7% and minus 10%. Thailand’s Ministry of Commerce forecasts exports to grow 4% in 2021, as global trade improves thanks to the vaccine rollout in many countries.
(Sources: National New Bureau of Thailand; The Business Times; Pattaya Mail; ING)