Thailand expects to reduce its trade surplus with the United States by as much as $15 billion a year, or one-third, with its recent initiatives to prevent the misuse of origin rules for exports, according to Finance Minister Pichai Chunhavajira.
The government is committed to translating a number of anti-trade circumvention policies into action to ensure Thailand establishes a long-term, fair and balanced partnership in trade and investment with the US, Mr Pichai said at an American Chamber of Commerce conference in Bangkok on Tuesday.
The minister did not say when the expected reduction would be achieved, but such a cut would represent about a third of Thailand’s outstanding $46-billion trade surplus with Washington last year.
Thailand has submitted a framework of proposals to the Trump administration to kickstart official negotiations to avert a 36% tariff on its goods, which could take effect in early July if no agreement is reached.
The Thai offers, including steps to tackle trade rerouting by Chinese businesses, lowering of tariff and non-tariff barriers and ramp-up in investment, could be beneficial to both the nations, Mr Pichai said.
“I’m positive that we have a strong set of practical and viable proposals that can effectively lead to win-win results and deliver tangible quick wins,” said Mr Pichai, who is designated to lead the Thai delegation for talks with US officials.
The United States was Thailand’s largest export market last year, accounting for about 18% of the country’s total shipments.
On Monday, Thailand said it was suspending investment promotion for certain sectors that carry oversupply risks or negative environmental impact and will ensure greater scrutiny of new investment proposals to ensure “essential production processes” happen in the country.
It has also streamlined the process of issuance of “certificate of origin” and added more industrial products to a watchlist.
With Thailand exploring more investments by private companies in the US, there will be more collaborations in the field of energy, digital technology and infrastructure, wellness tourism and creative industries, Mr Pichai said.
Thai firms could invest at least $2 billion in the US soon, Nalinee Taveesin, president of the Thailand Trade Representatives, said last week after leading a delegation to the US. The country nation has also expressed interest in joining a massive gas pipeline project in Alaska backed by President Trump.
Mr Pichai said he also expected more collaboration between the two countries in the energy sector in Thailand.
“We have pending areas in the Gulf of Thailand and another unexplored area on the Andaman side,” he said of potential oil and gas deposits. “I believe that with US technology, these areas have potential. I think opportunities will come very soon.”
He encouraged the private sector to tap sectors with potential such as digital technology and infrastructure, agriculture and food processing, wellness tourism and creative industries.
Strategically important
US ambassador Robert Godec said the partnership with Thailand is strategically important as the US is deeply engaged in this region, while US-Thai trade remains robust and continues to grow.
Like Thailand, the US also wants trade to be free, fair and balanced, said Mr Godec, adding that enhancing market access for goods and eliminating non-tariff barriers is essential.
“We look forward to the discussion with Thailand on trade at an appropriate time,” he said.
Chanintr Chalisarapong, president of the Thai Pet Food Association, said the US tariffs and ongoing negotiations for a Thailand-EU free trade agreement offer significant opportunities for reform in Thailand.
He said Thailand needs to import more raw materials globally to lift production across various sectors, highlighting the potential of the US to provide essential raw materials such as corn, soybeans and tuna.
The new US policy is a catalyst for change, said Mr Chanintr. By eliminating quota systems and other barriers to importing raw materials, Thailand can significantly enhance its production capabilities in poultry, feed, seafood and livestock, he said.
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