BANGKOK — The Free Trade Agreement (FTA) between Thailand and the European Free Trade Association (EFTA) has been finalized and represents a historic milestone as it is the first FTA Thailand has signed with a European bloc.
EFTA currently comprises four member countries: Iceland, Liechtenstein, Norway and Switzerland. The agreement, which has been under negotiation since June 20, 2022, was a strategic goal for Thailand and EFTA, which aimed to conclude negotiations within two years. Both parties have alternated rounds of negotiations to finalize the terms.
The Trade Negotiations Department under the Ministry of Commerce played a central role and finalized agreements on 15 major issues: (1) trade in goods, (2) rules of origin, (3) trade facilitation, (4) remedies, (5) sanitary and phytosanitary measures, (6) technical barriers to trade, (7) trade in services, (8) investment, (9) intellectual property, (10) competition, (11) public procurement, (12) trade and sustainable development (including environmental and labor issues), (13) technical cooperation and capacity building, (14) legal issues and dispute settlement and (15) small and medium-sized enterprises (SMEs).
When the negotiations are completed, the Ministry of Commerce will submit the results to the Cabinet for approval, paving the way for Thailand to sign the free trade agreement with EFTA member countries in January 2025. Prime Minister Paetongtarn Shinawatra and Commerce Minister Pichai Naripthaphan will attend the World Economic Forum (WEF) in Davos, Switzerland, as part of the preparations for the signing.
Once signed, the Thai government will submit the agreement to parliament for ratification so that it can enter into force and bring tangible economic benefits to Thailand.
A New Chapter in Thailand’s Trade
Commerce Minister Pichai Naripthaphan announced that the EFTA Secretariat has officially recognized the successful conclusion of the negotiations. This success is in line with the government’s policy to expand trade and investment opportunities, including free trade agreements with key partners. The Thai government has prioritized such agreements to increase export potential, improve the competitiveness of Thai businesses and attract foreign investment.
Minister Pichai pointed out that negotiations for the Thailand-EFTA FTA, which commenced in 2022, were successfully concluded within two years, reflecting the government’s commitment to promoting trade and investment.
This FTA represents a new chapter in Thailand’s trade history by introducing a high standard agreement that is in line with modern trade regulations and sustainable development goals. It also lays the foundation for further FTA negotiations with key partners such as the European Union.
Since taking office in September 2024, Pichit has instructed the Trade Negotiations Department to accelerate the ongoing free trade talks. He credited the success of this agreement to cooperation within the Ministry of Commerce, particularly with Permanent Secretary Wuttikrai Leewiraphan and Director General Chotima Iamsawatthikul of the Trade Negotiations Department. The agreement is seen as a New Year’s gift for Thailand’s economy.
In 2024 (January-October), trade between Thailand and EFTA amounted to 10.29 billion US dollars, representing 2.03 percent of Thailand’s global trade and a year-on-year increase of 23.22 percent. Thailand exported 3.79 billion US dollars to EFTA and imported 6.51 billion US dollars.
Major exports included gems and jewelry, watches, canned fish and processed seafood, travel goods, machinery, electrical panels, air conditioners, cosmetics, plastics and rice. The most important imports included precious metals, watches, meat products, fertilizers, pharmaceuticals, machinery and scientific instruments.
As for the free trade agreement between the EU and Thailand, negotiations are underway with the 27-member bloc, which also includes Austria, Belgium, Bulgaria and others, with the aim of concluding talks by 2025. The EU is Thailand’s fifth largest trading partner. In 2023, trade between Thailand and the EU amounted to 41.71 billion US dollars, an increase of 1.75 percent. However, Thai exports to the EU decreased by 3.68 percent, while imports increased by 8.55 percent.
In 2024 (January-October), trade between Thailand and the EU reached 36.43 billion US dollars, an increase of 3.42 percent. Thai exports increased by 9.28 percent to 20.12 billion US dollars, while imports decreased by 2.99 percent to 16.31 billion US dollars.
