Indications suggest that the United Kingdom will move to create its own trading regulations and standards which may be less political and more pragmatic than those of the European Union. This could be to Thailand’s advantage as a bilateral deal will be easier to confirm and more commercially focused.
Thailand’s trade exports at the Department of Trade Negotiations will turn their attention this month to examining existing trade relations and a possible free trade deal with the United Kingdom after Brexit was announced on the 31st January and the UK is set to become an independent trading partner on January 1st 2021, free from European treaty obligations.
The Thai Department of Trade Negotiations at the Ministry of Commerce is preparing for a future meeting with UK negotiators to allow for discussions on the possibility of a future free trade agreement between Thailand and Great Britain.
The Director-General at the Department, Auramon Supthaweethum, has revealed that key meetings will take place on February 7th and 13th as officials review the details of trade between Thailand and the United Kingdom in both directions.
Britain is Thailand’s 21st biggest trade partner
The United Kingdom is currently the kingdom’s 21st biggest trading partner while the European Union is its third-largest. For trade purposes, although the UK has left the European Union as of last Friday the 31st of January, it still maintains the same trading relationships up to the end of 2020.
UK takes up new WTO role this week
The UK has this week reached out to the World Trade Organisation to prepare the way for the new trading environment on the 1st of January 2021. Although it has been a member of the WTO since 1995, it will now negotiate on its own behalf as an independent trading nation.
First task now is existing trade quotas
This week, Ms Auramon has pointed out that the first impact of Brexit on Thailand’s trading relationship with the UK will involve negotiating separate quotas for the UK under WTO rules for key Thai exports such as canned fish, tapioca, cassava, rice and poultry which up to know have been set with the European Union.
Thailand has a ฿43 billion trade surplus with Britain
Trade between Thailand and the United Kingdom is worth ฿190 billion ($6.2 billion) and currently, Thailand has a trade surplus of ฿43 billion ($1.4 billion). Thailand’s exports to the UK include automobiles, jewellery, poultry and electronics while in return it imports electronics, pharmaceuticals, machinery and beverages.
Both countries interested in a free trade deal
Both Thailand and the United Kingdom are looking at the negotiation of a free trade agreement but the initial focus of Thai negotiators is to make sure that when full Brexit in terms of trade happens at the end of this year, there will be no unforeseen problems or impediments.
European Union negotiations to begin shortly
Thailand last year agreed at cabinet level to open negotiations with the European Union for a free trade agreement and there is no doubt that both sets of negotiations will have some bearing on each other not least to see which agreement comes first and if so, how fast will it be ratified.
The UK is also interested in paving the way to join the Asia Pacific Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which includes 11 countries including Vietnam, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Australia.
Johnson moving towards a less political form of trade
The United Kingdom is committed to defining its own trading relationship with countries around the world and its own independent regulatory environment according to a speech on Monday by British Prime Minister Boris Johnson as he put the EU on notice that Britain would not accept former treaty obligations or burdensome regulations in its new role.
UK free trade deal would be easier for Thailand
It is likely that the negotiations with the United Kingdom will be somewhat easier for Thailand. This is for two reasons. One is that the country has indicated that it favours a more pragmatic and less political approach to trade than the European Union.
The second is that any deal will be quickly ratified as it will not need the approval of a carousel of multiple governments as is currently the case with the EU where 27 different states must sign off individually on any deal before it is ratified.