The European Union (EU) and Thailand have announced the resumption of negotiations for a free trade agreement (FTA), with a focus on sustainability. This development emphasizes the EU’s commitment to the Indo-Pacific region and its trade agenda, while also strengthening trade relations with the second-largest economy in Southeast Asia. The FTA will address market access, sanitary and phyto-sanitary procedures, intellectual property rights, and digital and energy trade. The agreement will also prioritize sustainability, with enforceable disciplines on trade and sustainable development that support workers’ rights, environmental protection, and ambitious climate goals.
The EU and Thailand already have established trade relations with significant potential for closer ties. In 2020, trade in goods was worth over €42 billion, and trade in services was worth over €8 billion. Thailand is the EU’s 4th most important trading partner in the ASEAN region and the 2nd largest economy. The EU is also the third-largest investor in Thailand and accounts for nearly 14% of total Thai FDI. However, EU investors are underrepresented in key innovative sectors such as clean and renewable energies, electric vehicles, and microchips.
The EU and Thailand aim to hold the first substantive round of negotiations soon, and the EU will publish its text proposals after the first round. Additionally, a Sustainability Impact Assessment will be commissioned to analyze the agreement’s possible economic, environmental, human rights, and social impacts and provide recommendations on maximizing positive effects while minimizing negative ones. The EU and Thailand are committed to moving swiftly in the negotiations.
The EU and Thailand first launched FTA negotiations in 2013 but put them on hold in 2014 due to a military takeover in the country. In 2017 and 2019, the EU adopted an approach of gradual re-engagement, culminating in the Partnership and Cooperation Agreement’s signature in 2022. The EU’s Indo-Pacific Strategy in 2021 further confirmed the EU’s interest in resuming FTA negotiations with Thailand. The EU already has FTAs with Singapore and Vietnam, two ASEAN countries.
Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.