Thailand Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

The EU as a whole (EU-27) is one of Thailand’s important trading partners. Thailand’s foreign trade balance with the EU has been in surplus for a long time (import of food, electronics, cars to the EU). The Free Trade Agreement (FTA) between the EU and Thailand is under discussion.

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 13,598.00 13,500.30 13,551.60 11,423.30 13,268.40
Imports into the EU (million EUR) 18,922.50 19,635.70 19,688.30 17,938.20 22,018.30
Balance with the EU (million EUR) ON ON ON ON ON

Source: European Commission

Trade relations with the Czech Republic

Similar to the rest of the EU-27, the Czech Republic’s trade balance with Thailand has been negative for a long time due to, among other things, enormous imports of consumer electronics (computer technology), cars and food (rice).

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 29.3 3.9 3.8 3.3 ON
Imports to the Czech Republic (billion CZK) 4.2 28.9 30.6 30.5 ON
Balance with the Czech Republic (billion CZK) -25 25 26.9 27.2 ON

Source: businesscarriers.com

Trade relations with countries outside the EU

The most important trade partners of Thailand include China, Japan, the USA and the states of the ASEAN association. A number of MNCs (JP, CN) have a manufacturing base in Thailand as part of their global value/supply chains.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 184,896.4 200,017.7 192,788.6 181,417.0 216 165.3
Imports to countries outside the EU (million EUR) 151,881.8 174,926.3 164,006.5 140,098.5 173 402.1
Balance with non-EU countries (million EUR) 33,014.6 25,091.5 28,782.1 41,318.4 42,763.2

Source: EIU, Eurostat

Foreign direct investment

In the past, Thailand has been very successful in attracting foreign direct investment (FDI/FDI) in the automotive and electronics manufacturing sectors, especially from Japan, the USA, Singapore and, in recent years, China. However, other countries in the ASEAN region, such as Vietnam, Laos and Cambodia, are now starting to compete strongly with Thailand.

The Thailand Board of Investment (BoI) investment agency operates in the country, which ensures initial contact with investors (promotion of the country and its investment opportunities, tax incentives). The government’s showcase for FDI is the industrial region east of Bangkok – the so-called Eastern Economic Corridor (EEC).

Production FDI of Czech entities in Thailand is unknown. However, there are cases of Czech citizens investing in Thai real estate, especially in the field of tourism.

FTAs and treaties

Treaties with the EU

A mutual FTA between Thailand and the EU does not exist, preparations for resuming the negotiation process continue.

Contracts with the Czech Republic

Agreement between the government of the Czech Republic and the government of the Kingdom of Thailand on air services

Agreement between the Czech Republic and the Kingdom of Thailand on the surrender of offenders and cooperation in the execution of criminal sentences

Agreement on cooperation between the Ministry of Foreign Affairs of the Czech Republic and the Ministry of Foreign Affairs of the Kingdom of Thailand

Agreement on economic cooperation between the government of the Czech Republic and the government of the Kingdom of Thailand

Agreement on the abolition of the visa requirement for holders of diplomatic and service passports between the Government of the Czech and Slovak Federative Republic and the Government of the Kingdom of Thailand

Agreement between the Government of the Czech Republic and the Government of the Kingdom of Thailand on the support and protection of investments

Treaty between the Government of the Czech Republic and the Royal Government of the Kingdom of Thailand on the avoidance of double taxation and the prevention of tax evasion in the field of income taxes

Note: detailed information on the contractual base is available on the website of the Ministry of Foreign Affairs of the Czech Republic

Developmental cooperation

In recent years, so-called small local projects (MLP) have been implemented annually in the north of the country in the area of ​​the city of Chiang Mai (e.g. cleaning of surface water in drainage canals or disposal of bio-waste through the process of anaerobic fermentation).

Prospective fields of study (MOP)

Transport industry and infrastructure

Expansion of public transport in Bangkok (metro, elevated expressway, buses, electromobility) and in other areas of the country (including the island of Phuket or the city of Chiang Mai) as well as a high-speed railway connecting large airports, ports and economic zones east of Bangkok (the so-called Eastern Economic Corridor, EEC) are among the most watched projects of the Thai government (investment plan in 2022 in the amount of approx. 45 billion USD). The further development of domestic and international air transport, the increase of repair capacities and the improvement of air traffic management in order to revive tourism and post-covid recovery of the state will be the government’s priority in the near future.

ICT

In Thailand, there is an extensive “ecosystem” of technology companies and start-ups connected to a cutting-edge system of science and research, universities and the private sector. Foreign investors (electrical engineering, automotive, but also banking) intend to increase the share of automated and robotic systems. Thai entities cooperate with the world’s best workplaces. The greatest potential for Czech companies can be found in the focus on e-commerce, fintech, internet of things/IoT, artificial intelligence/AI, but also in the defense and security sector (cyber security, personal tracking, thermal scanning, etc.). Foreign investment in Thai fintech and logistics start-ups is estimated to be up to USD 26 billion in the post-Covid period.

Defense industry

The armed and security forces are one of the pillars of the monarchy and an important social force. Defense spending makes up a large part of Thailand’s national budget (around USD 7 billion annually, i.e. approx. 1.5% of GDP). Defense-industrial cooperation, support of Thai industry, joint development or joint expansion to third markets will play an increasingly important role in the future. The possibilities for mutual cooperation under discussion are also related to the development of the aviation and automotive industries, public health protection or science, research and innovation (VVaI).

Healthcare and pharmaceutical industry

Thailand boasts top-notch healthcare (technologically advanced equipment, quality staff). The government has included healthcare (including cosmetic or the use of cannabis for medicinal purposes) and the production of medical equipment/medicines among the priority areas of development. The country plans to become a regional center/hub for a number of complicated medical procedures (joint replacements, gynecology, dentistry, cosmetics) in the near future. The current effort of post-covid recovery is to ensure safe tourism and general strengthening of medical capacities in the most affected or remote areas. The share of growing health care expenditures reaches 3.8% of GDP, i.e. approximately USD 18 billion.

Agricultural and food industry

Thailand has ideal conditions for growing a number of export crops (rice, coffee, tropical fruits, rubber trees) as well as large capacities in the area of ​​animal production (poultry, fish, shrimp). The government’s priority is the processing of primary raw materials with higher added value. The possibility of successful importation and use of Czech products on the Thai market appears as a result of the “taste for experimentation” among the younger/richer strata of society within the general popularity of food as a strong element of social interaction. A number of Thai/multinational manufacturing facilities are involved in biotech and novel foods science, research and innovation.

Water management and waste industry

Thailand, like a number of other rapidly developing economies, has problems with the quality of the environment – air, water, waste. The government is aware of the need to protect the environment, which is why it has recently included among its priorities topics such as “smart” solutions in the field of green/BCG (bio-circular-green) economy – including circular economy and waste recycling, waste-to-energy, etc. The newly approved government strategic document – ​​the so-called action plan for the development of the BCG economy (for the period 2022-2027) – includes a budget for its implementation in the amount of approximately USD 1.25 billion. Opportunities for Czech companies could also be the supply of water management and irrigation equipment and wastewater treatment plants (especially for large cities and industrial plants).

Thailand Trade