The EU and Thailand have announced that negotiations are being relaunched for an ambitious, modern, balanced and sustainable free trade agreement (FTA). This announcement confirms Indo-Pacific’s importance to the EU’s trade agenda. It opens the door for deeper trade ties and strengthens the EU’s strategic engagement with this region.
FTA’s goal is to increase trade and investment. It will address a wide range issues, including: market access for goods and services; quick and effective Sanitary, Phyto-Sanitary, and Intellectual Property Rights, including Geographical Indications. The FTA will also support digital and green transitions by removing obstacles to digital trade as well as trade in energy and raw material. This agreement will be based on sustainability, and it will include strong and enforceable rules for Trade and Sustainable Development (TSD). These will be in line the Commission’s TSD review Communication of Juni 2022. They will support high levels of protection of workers’ rights and for the environment as well as the achievement of ambitious climate goals.
Key trade statistics
Thailand and the EU already have strong trade relations. There is clear potential to build closer ties.
- In 2022, trade in goods was worth more than EUR42 billion. However, in 2020, trade in services was worth more than EUR8bn.
- The EU is Thailand’s fourth biggest trade partner.
- Thailand is the second-largest economy in the ASEAN region. It is also the EU’s 4 th most significant trading partner in this region (and the 25 th globally).
- The EU is Thailand’s 3 rd biggest investor, with around 10% of total foreign direct investment (FDI). It also accounts for almost 14% of Thai total FDI.
Despite Thailand’s high ranking in total trade and FDI, EU is not well-represented in key sectors such as clean and renewable energy, electric vehicles and critical goods, like microchips. The EU’s priority in Thailand’s economic development strategy is infrastructure and the transition to a technology and innovation-driven economy. This represents further potential for EU businesses and investors.
Next steps
Both the EU and Thailand have committed to moving quickly in FTA negotiations and hope to hold a first substantive round in the next months. In line with our transparent policy, the EU will publish its text proposals after the first round of negotiations. In support of negotiations, the EU will also commission a Sustainability Impact Assessment. This is a study of possible economic, social, and human rights impacts and provides recommendations for how to maximize the positive effects and minimize potential negatives.
Background
In 2013, the EU and Thailand launched negotiations for an FTA. After the military coup in Thailand, negotiations for an FTA were stopped. The Council adopted Conclusions in 2017 and 2019 in response to Thailand’s progress in democratisation. This led to the signing of the Partnership and Cooperation Agreement (December 2022).
Concerning trade, the 2017 & 2019 Council Conclusions urged the Commission to investigate the possibility of resuming FTA negotiations with Thailand. They also stressed the importance taking steps in this direction. The 2021 EU Indo-Pacific Strategy further confirmed that the EU is interested in restarting FTA negotiations. Two ASEAN countries, Singapore and Vietnam, have FTAs that are state-of the-art with the EU.
More information
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