Thailand's trade with Russia could help improve slumbering exports because the sprawling Eurasian country has potential as a rich channel for Thai goods and services, says Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI).
Thai exports fell for the fourth straight month in June, due to weak global demand amid the world's economic slowdown, ongoing international trade tensions between the US and China, and lower oil prices.
The Commerce Ministry said in July that for the first six months of 2019, the country's overall shipments dropped 2.9% year-on-year to US$113 billion.
"This is the channel that we should look more into," Mr Supant told the Bangkok Post at the 2nd Russian-Thai Business Forum held yesterday. "Russia is a big country that consumes lots of products worldwide."
Russia's population is roughly 145 million.
What the Thai government should do, Mr Supant said, is find ways to increase trade volume between the two countries to ease the unwanted effects from the US-China trade war that is hurting Thailand's exports right now.
"Russia has been backing away from its relationship with the US for quite some time now, so its trade volume is depending more on domestic demand and China, and what we could do is increase our trade with them as well," he said.
One concern Mr Supant acknowledged is that exporting to Russia is "quite complicated" at the moment because of the high level of regulations and a tax system that is still "quite unsupportive".
"This is where the Thai and Russian governments could work together in negotiation to make the trading situation between the two countries more conducive," he said. "If we can fix these problems, then the trade volume between the two countries could increase quite substantially."
Kriengkrai Thiennukul, the FTI's vice-chairman and the federation's point man on relations with Russian businesses, told the Bangkok Post that Thailand and Russia already have some trade agreements with one another which contributed to trade volume of about $3.5 billion last year, but the figure is still "small".
"Thailand shipped about $1 billion worth of goods to Russia and imported about $2 billion, which means that we are the one with the trade deficit," Mr Kriengkrai said. "Nevertheless, the prime minister and the Russian president already met about two years ago and they both commented that there was still a lot of room to improve the bilateral relationship."
Prime Minister Prayut Chan-o-cha met with Russian President Vladimir Putin at the Brics Summit in Sochi in 2017.
The target for the trading relationship between the two countries remains set at $10 billion per year by 2020, Mr Kriengkrai said, and it's up to the related agencies, such as the Foreign and Commerce ministries, to work together to meet the goal.
He said the Eastern Economic Corridor scheme is the main area that could improve cooperation between two countries, as the EEC is aiming to develop new S-curve industries for the Thai economy based on digital transformation.
Since Russia has expertise in information technology, a great opportunity is available for Thailand to use the EEC to attract Russian investment flows.
"On the other hand, Russia is also urging Thai investors to invest in Russia's agricultural, food and furniture sectors," Mr Kriengkrai said.
"President Putin is concentrating on his country's food security right now, which presents a good opportunity for Thai investors in the food sector to invest in Russia," he said. "Meanwhile, Russia also has lots of forest land that could be turned into furniture, and they are inviting us to invest in this field as well."