Thailand, Bhutan start trade talks
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Thailand, Bhutan start trade talks

Aiming to complete deal by next year

Mr Napintorn, right, with Bhutanese Prime Minister Tshering Tobgay.
Mr Napintorn, right, with Bhutanese Prime Minister Tshering Tobgay.

Thailand and Bhutan opened free trade agreement (FTA) negotiations, aiming to complete the deal by next year.

Deputy Commerce Minister Napintorn Srisunpang said Bhutanese Prime Minister Tshering Tobgay signed the terms of reference to commence FTA negotiations.

Mr Napintorn said both nations view the FTA as an important mechanism to enhance bilateral trade and investment, reduce trade barriers and provide better market access, especially for agricultural products, aiming to reach a target of US$120 million by 2025.

Both countries also discussed Bhutan's planned development project of a "Mindfulness City" near the town of Gelephu, along Bhutan's southern border with India.

The plan for the city is to serve as an economic hub and tourist gateway to the rest of the country. The city plan calls for a low to mid-rise metropolis built around a series of inhabitable bridges.

According to the plan, each bridge will "house" key features of the city: a new international airport, a university, a hydroponic greenhouse, a cultural centre, a spiritual centre, a market for local goods and a hydroelectric dam, envisioned as a new economic hub for the country.

Mr Napintorn said the project will be an economic corridor connecting South Asia with Southeast Asia via India's northeastern region and the Thai business sector has the potential to be a partner in developing this project.

The Thai side has requested information about the incentives and regulations related to business operations and investment in such projects.

Thailand and Bhutan have always enjoyed close bonds of friendship given their shared Buddhist spiritual heritage and a love for their monarchy, as well as strong relations at all levels which include economic cooperation, particularly in the areas of agriculture, tourism, investment and handicrafts.

Many tourist from Bhutan travel to Thailand for health and wellness tourism services and Bhutan has expressed an interest in participating in a tourism festival in Thailand to promote the culture and tourism of Bhutan.

Thailand commended Bhutan's continued economic development as it exited the list of least developed countries in December 2023 and assured that King Jigme Khesar Namgyel Wangchuck's new vision to transform Bhutan into an economic hub for South Asia will facilitate its goal of becoming a high-income country by 2034.

Chotima Iemsawasdikul, director-general of the Trade Negotiations Department, said the first round of negotiations held on May 17 in Thimphu, Bhutan finalised the structure and outline of the FTA, identified the various working groups, focal points and agreed on a work plan for the negotiations.

The next round of FTA negotiations will be hosted by Thailand in August. The agreement is expected to be completed by November 2025.

When the FTA with Bhutan is implemented, tariffs and non-tariff barriers will be eliminated, aiming to increase the competitiveness of export products, namely dry fruits, garments, rubber and plastic products, and electronic appliances.

Trade between the two countries has grown steadily over the years with total trade in goods accounting for $18.7 million in 2023. For the first three months of 2024, the value of two-way trade between Thailand and Bhutan tallied $3.06 million.

Exports were valued at $3.03 million, while imports were valued at $30,000.

Key exports include computers and computer parts, textiles, wheat, electrical appliances and ready-to-eat food.

Key imports include aviation equipment and components, metal products and fine arts.

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