Thailand to Sign Historic First European Trade Pact at WEF

European
World Economic Forum

BANGKOK — Thailand will make history at this month’s World Economic Forum (WEF) in Davos, Switzerland, as it signs its first-ever free trade agreement with European nations. The Thailand-EFTA Free Trade Agreement, scheduled for January 23, 2025, will connect Thai businesses with four wealthy European markets – Switzerland, Norway, Iceland, and Liechtenstein – while potentially paving the way for broader European Union trade talks.

The landmark deal, which brings Thailand’s total free trade agreements to 16, comes at a time of growing economic ties between the partners. Trade between Thailand and EFTA nations reached 11.46 billion dollars in the first eleven months of 2024, marking a significant 24.94 percent increase from the previous year.

“This modern free trade agreement is comprehensive and goes beyond traditional trade and investment frameworks,” says Poonpong Naiyanapakorn, Director of the Trade Policy and Strategy Office. The agreement incorporates high environmental and sustainability standards, positioning Thailand as a key manufacturing hub in the region.

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Thai Commerce Minister Pichai Naripthaphan celebrates with EFTA representatives after finalizing the free trade agreement. (Department of Commerce)

The pact opens new opportunities for Thai exporters, particularly in gems and jewelry, watches and components, steel products, processed seafood, and travel accessories – the country’s top five exports to EFTA nations. In return, Thailand gains better access to crucial imports including precious metals, pharmaceutical products, and advanced industrial goods.

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In the first 11 months of 2024 (January to November), Thailand and EFTA recorded a total trade value of 11.46 billion dollars, accounting for 2.05 percent of Thailand’s global trade. This represents an increase of 24.94 percent compared to the same period last year.

Thailand exported 4.1 billion dollars to EFTA and imported 7.34 billion dollars from EFTA. The top five exports were (1) gems and jewelry, (2) watches and components, (3) steel, iron and allied products, (4) canned and processed seafood, and (5) travel accessories. The top five imports were (1) gems, silver bullion and gold, (2) watches and components, (3) meat for human consumption, (4) pharmaceutical products and (5) fertilizers and pesticides.

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The FTA negotiations aim to expand Thailand’s trade partnerships, reduce trade barriers, boost confidence and attract foreign trade and investment. This will improve standards, create competitive advantages and strengthen the global competitiveness of Thai businesses. The agreement is expected to strengthen Thailand’s role in global supply chains, support Thailand as a major manufacturing center in the region, and promote beneficial cooperation and stronger diplomatic relations.

Commerce Minister Pichai Naripthaphan’s office has signaled that this agreement is just the beginning, with plans to accelerate similar deals with the European Union, South Korea, Bhutan, and the United Arab Emirates throughout 2025.

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Thailand Seals Major Deal: Thai-EFTA FTA, Progress Toward EU Agreement