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The Thai government has taken an active role in international trade relations. Thailand is a member of APEC (Asia-Pacific Economic Cooperation), AFTA (ASEAN Free Trade Area), the Cairns Group and GATT (General Agreement on Tariffs and Trade). This has resulted in the opening of more trade and investment opportunities.

Multilateral Trade Agreements

Thailand acceded to the GATT in 1982. It is also a member of other multilateral trade organisations such as the United Nations, UNCTAD, the Food and Agricultural Organisation of the United Nations, The World Bank, the International Monetary Fund, the International Finance Corporation, and the Asian Development Bank.

Furthermore, Thailand has taken an active role in a number of commodity agreements and arrangements such as the International Coffee Agreement, the International Agreement on Jute and Jute Products, the International Rubber Agreement, the International Sugar Agreement, the International Agreement on Tropical Timber, the Asian and Pacific Coconut Community, the Association of Natural Rubber Producing Countries, Association of Tin Producing Countries and the UNCTAD International Tin Study Group.

Regional Trade Agreements

Thailand, Indonesia, Malaysia, the Philippines and Singapore established the Association of South East Asian Nations (ASEAN) in 1967. Participants cooperate through the Agreement on ASEAN Preferential Trading Arrangements of February 1977. The Agreement covers long-term quantity contracts, purchase finance support at favourable interest rates, preference in Government procurement, extension of tariff preferences, liberalisation of non-tariff barriers on a preferential basis, and other measures mutually agreed upon. Among these, the most widely applied mechanism is the exchange of tariff preference. The negotiations on trade preference are operated by the ASEAN Committee on Trade and Tourism and authorizes by the ASEAN Economic Ministers.

The ASEAN members cooperate in economic, social and cultural matters with non-ASEAN countries which are referred to as ASEAN dialogue partners. The dialogue partners are Australia, Canada, the European Union, Japan, New Zealand, the Republic of Korea, and the United States.

The objective of the ASEAN Free Trade Area or AFTA is to reduce tariffs on all ASEAN- originating manufactured and processed agricultural products to 0-5% by the year 2003. By the year 2000, most of the tariff cuts will be completed. By late 1995, unprocessed agricultural products were on the scheme, too. Thailand and some ASEAN countries are cutting tariffs on raw materials as well. Such cuts will increase the competitiveness of domestic industries relative to those from other ASEAN countries.

The cooperation between AFTA and the Closer Economic Relations (CER) agreement has been discussed. Cooperation will be in the areas of trade, investment, customs standards, intellectual property rights and human resource development.

Thailand is also a member of the Asia-Pacific Economic Cooperation (APEC), believing that the association will strengthen the multilateral trading system rather than build trading blocs. APEC aims to sustain the growth and development of the region and to contribute to the growth and development of the world economy. In doing so, it seeks to complement existing organisations such as ASEAN and the Pacific Economic Cooperation Conference (PECC).

Bilateral Trade Agreements

In 1991, Thailand had bilateral trade agreements with 32 countries and negotiated with another 21 countries. Apart from bilateral trade agreements, Thailand has a treaty of Amity and Economic Relations with the United States of America. Thais treaty deals with such matters as foreign investment, patents, taxation, trade policies, and dispute settlement.

 TRADE PERFORMANCE

Structure of Trade Policy Formulation

Economic activity in Thailand is mainly carried out by the private sector. The Government acts as coordinator, advisor and supporter, controlling economic activities through a range of policies. Policy formulation is undertaken by Ministerial Committees, such as the Export Development Committee, which considers general export development policy. In addition to regular Committees, ad hoc Committees may be established in special cases. Decisions regarding trade policy are recommended by Committees which comprise civil servants as well as outside experts. A Joint Public-Private Consultative Committee provides a link between the private sector and Government policy-making.

The Ministry of Commerce is responsible for general trade and commercial policies such as import and export controls, anti-dumping and countervailing, bilateral and multilateral trade negotiations, and export promotion. Other responsibilities of the Ministry of Commerce include weight and measurements standardisation and control, intellectual property issues, and commercial registration. Tariffs are the domain of the Ministry of Finance.

The Government generally reviews trade policy in the context of its national development plans under the auspices of the National Economic and Social Development Board (NESDB). The Government may seek the advice of the Thailand Development Research Institute (TDRI), and other research bodies in universities.

Trade Policy Objectives

The two main objectives of Thailand’s trade policy are liberalisation and the expansion of world trade. For agriculture, trade policy aims are to maintain economic growth and stability through an expansion of output and exports, to promote equitable income distribution, to improve the quality of life, and to protect the environment. Trade policy objectives for industry include increasing operational efficiency, the promotion of private sector participation, decentralisation of investment and production, and tackling the problem of environmental degradation.

To achieve these objectives, Thailand supports the multilateral trading system. The first priority for Thailand in trade liberalisation is tariff cuts among member countries in AFTA to promote intra-ASEAN trade and investment over the next decade. As a member of APEC, Thailand has agreed to liberalise trade by the year 2020. To achieve this objective, the Thai Government announced its intention to reduce half of all tariffs into 60 levels: zero, 1%, 5%,10%, 20% and 30%. Average tariff rates will be brought down from 34.95% in 1994 to 24.77% by the end of 1995 and to 17.26% by 1997.