Thailand signs partnership agreement with European Union
As a precursor to an eventual free trade agreement, Thailand signed a partnership and cooperation agreement (PCA) with the European Union (EU) last week in which the two sides pledged to work together on global issues ranging from human rights to counterterrorism.
The agreement is an “important vehicle to strengthen the dialogue in the economic and trade domain,” said Guillaume Rebiere, Executive Director of the European Association for Business and Commerce in Thailand. “Thailand is an important trade and political partner. Both businesses and investors will be encouraged by the signing of this agreement.”
The two sides began negotiating the agreement in July 2021 and have renewed talks on a free trade agreement (FTA). Bryan Tse, lead analyst on Thailand at the Economist Intelligence Unit, said that he expects the FTA would be signed between 2024 and 2026.
Bilateral trade in goods between the EU and Thailand amounted to $35.3 billion in 2021, up from $29.2 billion the previous year, according to EU statistics. The EU is the second-largest investor in Thailand, after Japan.
Thailand hopes to forge an FTA with the EU to help diversify its trade partnerships. The Kingdom is heavily reliant on exports to the U.S. and China and would like to broaden its major trading partnerships to ensure more economic resilience.
Trinh Nguyen, a senior economist covering Emerging Asia at Natixis, said that a free trade deal makes sense for both sides. “It would signal a boost to relations from both sides as they both are more willing and eager to work with one another to diversify sources of growth and investment,” she said.
Photo courtesy of https://twitter.com/mfathai/