Trade with North Korea tipped to rise
Removal of sanctions expected over time
Thailand's export prospects are forecast to improve after tensions between the US and North Korea eased.
Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office (TPSO), said the Singapore summit's results on Tuesday heralded positive signs for world trade.
"Since Donald Trump became the US president, the Korean Peninsula has been an area of greater concern," she said. "The agreement between the two countries on Tuesday not only helps stabilise global trade sentiment but also delivers a positive effect to the world's financial, capital and commodities markets. It will be good for Thai exports in the long term."
Two-way trade between Thailand and North Korea totalled US$2.38 million (76.5 million baht) in 2017 as Thailand adhered to UN sanctions against the Kim regime.
If North Korea revives international trade relations, it will offer a good opportunity for Thailand to export more goods to North Korea, notably processed food and fruits; consumer and daily-use products such as garments and housewares; raw materials; and industrial and construction goods such as rubber, plastic products and machines.
"Direct trade between Thailand and North Korea will definitely increase, while Thailand's trade with China for intermediate goods will become much more convenient," Ms Pimchanok said.
But she warned that Thai exporters and importers still need to monitor developments, as the US has vowed to continue imposing economic sanctions on North Korea until the latter follows through on the agreement.
In 2017, North Korea reported trade volume worth $5.38 billion. Exports included garments, minerals and fuel, seafood, iron and steel, and vegetable and fruit products, while imported products included electric machinery, appliances and components, machines and components, plastic pellets and products, garments and textiles.
China was North Korea's largest trade partner, with two-way trade between the two countries amounting to $5 billion in 2017.
Kalin Sarasin, chairman of the Thai Chamber of Commerce, said the prospects of Thai trade will improve as sanctions against North Korea are lifted.
"Safety and security is the most vital issue," he said. "If the peninsula turns to peace, Asia will become an interesting site for trade and investment."
Visit Limlurcha, vice-chairman of the Thai National Shippers' Council, said Thailand will be offered a better opportunity to export raw materials, consumer goods, computers, refrigerators and washing machines to North Korea.
"Direct shipments to North Korea are unlikely to increase much, because more than 90% of North Korea's trade is with China," he said.
The council is maintaining an export growth forecast of 8% this year.