Thai Free Trade Agreement

In addition to these rules, exporters must be able to accurately specify their product billings and understand their trade flows. This was a difficult undertaking for Thai companies, as experienced when they were modified the new version (2012) of Thailand`s HS code. Thai Customs asked the exporter (and importer) to indicate the classification of the goods under the new version, which was sometimes different from the previous version. During this period and according to the rules, country of origin (C/O) forms still required the old version of the HS code (2007), which had different references in the customs declaration. The obligation for Thai companies was to meet the requirements of a 2012 tariff change with outdated documentation of 5 years. As the process was difficult, some exporters did not wait for the C/O to be issued on time and skipped the process. According to the Ministry of Commerce, China (including Hong Kong) is by far Thailand`s largest trading partner, with a total trading value of $79 billion in 2015, with a trade value of $79 billion, followed by Japan with $51 billion and the United States with $38 billion. The other trading partners in the top ten are all Thailand`s neighbors in ASEAN and Asia-Pacific: Malaysia, Singapore, Indonesia, Australia and Vietnam. [i] The Thailand-Australia Free Trade Agreement (TAFTA) came into force on 1 January 2005. This agreement ensures better access to the Thai market for Australian products, improves the trading prospects for services and investments, improves the regulatory and investment environment and promotes business mobility. [iii] Thailand has signed 12 agreements (6 bilateral and 6 multilateral agreements) with 9 free trade agreements under negotiation or in the process of being adopted. These agreements could have a huge impact on Thailand`s trade and investment in the years to come.

Free trade agreements not only reduce import duties and eliminate tariffs on trade in goods, they are also an important catalyst for long-term investment and growth in participating countries. Most free trade agreements also have clauses that can help companies gain better market access and impose restrictions on the protection of their investments and intellectual property, while expanding business opportunities in terms of price competitiveness, market development and business, investment expansion and public procurement. [i] Trade Statistics, Ministry of Trade Negotiations: On the case in addition to these examples, there is a specific FTA term called the “Ratchet Mechanism”[1] or “Unilateral liberalisation of new services automatically engages within the framework of this particular agreement.” This mechanism, if included in the free trade clause, is only one way to prevent, particularly for trade in services and investment parties, from modifying or improving national legislation, directives or regulations and not being replaced by more restrictive amendments than previous conditions. For example, this mechanism was designed to make measures more beneficial under national laws In terms of the international ranking of trade and investment, Thailand ranked 49th out of 189 economies in the World Bank`s Ease of Doing Business 2016 chart. According to the ranking, and compared to the previous year, almost all difficulties have increased, including Thailand`s trade on cross-border groups (55 last year and 56 this year). For example, in the past, supply chains have identified barriers that generally lead to trade facilitation for physical infrastructure, as well as administrative barriers and delays in Thailand`s customs and export processes.