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Monday, February 10, 2025

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Thailand Finalizes Free Trade Agreement with EFTA

In a significant step for Thailand’s economic diplomacy, the country has finalized a Free Trade Agreement (FTA) with the European Free Trade Association (EFTA). The agreement, signed recently, is expected to boost Thailand’s global competitiveness, enhance exports, and attract investment in key industries such as artificial intelligence, data centers, and advanced manufacturing.

The negotiation process, which started two years ago, gained momentum under the current administration, concluding within three months. Officials have described the deal as a milestone for Thailand, with its potential to drive substantial economic benefits and position the nation as a preferred investment destination in the region.

Thailand’s exports are set to gain a significant boost from the agreement, particularly in sectors like jewelry, watches, machinery, air conditioners, plastics, and rice. Meanwhile, the deal will facilitate imports of high-demand goods such as pharmaceuticals, chemicals, and scientific equipment from EFTA countries. Trade volume between Thailand and EFTA nations reached $11.79 billion in 2024, accounting for 1.94% of Thailand’s total global trade and reflecting a notable 19.22% year-on-year growth.

Commerce Minister Pichai Naripthaphan emphasized the FTA’s role in strengthening Thailand’s trade position against regional competitors like Vietnam. He also expressed optimism about the agreement paving the way for negotiations with other strategic partners, including the European Union and the United Arab Emirates.

The government has outlined plans for public consultation on the agreement before submitting it to Parliament for approval, in line with constitutional requirements. Legal and regulatory adjustments are expected to be completed within a year to facilitate implementation. Businesses are being encouraged to prepare for the opportunities arising from reduced tariffs and improved market access.

In 2024, Thailand recorded a 5.4% growth in exports, and officials view the FTA as a catalyst for further economic expansion. The agreement has been hailed as a key component of Thailand’s efforts to usher in a “golden era” of growth and innovation.

The signing ceremony, attended by Prime Minister Paethongtarn Shinawatra, underscored the administration’s commitment to advancing the nation’s trade prospects. Last year, foreign direct investment inflows exceeded 1 trillion baht, and this landmark FTA is expected to amplify Thailand’s appeal to global investors.

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