The European Union (EU) and Thailand have agreed on a Partnership and Cooperation Agreement (PCA) which is a significant step in their bilateral relations. This agreement is the EU’s sixth agreement in Southeast Asia and reflects the importance of the region in global trade. The PCA aims to increase political dialogue on global issues and expand cooperation in various policy areas.
The European External Action Service, which is responsible for the European Union’s foreign and defense policy, stated that the PCA would provide more space for mutually beneficial cooperation. This PCA is also expected to strengthen economic and trade relations between the two parties. David Daly, EU ambassador to Thailand, confirmed that the agreement will be officially signed once institutional procedures from the EU and Thailand are completed.
Guillaume Rebiere, executive director of the European Association for Business and Trade in Thailand, stated that the PCA is an important vehicle for strengthening economic and trade dialogue. Thailand is considered an important trade and political partner for the EU, so this agreement has a strategic role in strengthening the EU’s presence in Southeast Asia. It is hoped that this agreement will encourage both parties to be more willing and enthusiastic to work together in diversifying sources of growth and investment.
Apart from that, this PCA is also expected to be the foundation for a future free trade agreement (FTA) between the EU and Thailand. Although David Daly insists that there is no direct link between the PCA and the FTA, Bryan Tse, lead analyst for Thailand at Economist Intelligence, estimates that the FTA could be signed between 2024 and 2026, unless political circumstances get in the way. The importance of this agreement can also be seen from the planned summit of EU and ASEAN national leaders in Brussels next December, which will mark 45 years of EU-ASEAN relations. This PCA is part of increasingly closer ties not only with Thailand but also with all of Southeast Asia and India. Thus, this PCA reflects the efforts of both parties to strengthen cooperation and enhance their role in global trade.
The Partnership and Cooperation Agreement (PCA) between the European Union and Thailand is a strategic move that reflects the desire of both parties to deepen economic and political ties. This PCA not only enhances dialogue and cooperation in various policy areas but also paves the way towards future free trade agreements. By recognizing the importance of Southeast Asia in global trade, this PCA demonstrates the EU and Thailand’s commitment to diversifying sources of growth and investment, which will ultimately strengthen their position in the global market.
In January 2023, Thailand and the European Union began negotiations for a free trade agreement (FTA) which is expected to strengthen economic ties between the two parties. Thailand’s Deputy Prime Minister and Minister of Trade, Jurin Laksanawisit, led a Thai delegation to Brussels, Belgium, to encourage these negotiations. During his visit, Jurin met with the European Union Trade Commissioner, Valdis Dombrovskis, to confirm Thailand’s willingness to hold FTA negotiations with the European Union.
Jurin stated that the FTA between Thailand and the European Union would significantly increase bilateral trade. This FTA is expected to provide many benefits for Thai business entities, especially in terms of priority exports of goods to the European Union market which consists of 27 member countries. With the FTA, lower trade tariffs and reduced non-tariff barriers are expected to open up new opportunities for Thai exporters, expand market access, and increase the competitiveness of Thai products in Europe.
This step was preceded by the signing of a Bilateral Partnership and Cooperation Agreement (PCA) in December 2022. The PCA created a strong foundation and provided encouragement for both parties to start FTA negotiations. This PCA not only underlines the commitment of both parties to strengthen bilateral cooperation in various fields, but also reflects the importance of economic relations between Thailand and the European Union in the context of global trade.
These FTA negotiations demonstrate Thailand and the European Union’s strategic efforts to diversify trading partners and expand economic opportunities. In the context of ever-evolving global geopolitics and economics, this step reflects the shared interest in creating a more open, fair and mutually beneficial trading environment. With the FTA, it is hoped that both parties can achieve more sustainable and inclusive economic growth.
Thailand is seeking to encourage economic growth through free trade agreement (FTA) negotiations with several countries and trading blocs, including the United Arab Emirates, Sri Lanka and the European Free Trade Association (EFTA) involving Iceland, Liechtenstein, Norway and Switzerland. One of Thailand’s main goals is to complete FTA negotiations with the European Union (EU), which is expected to increase annual economic growth by 1.2% and boost annual exports and imports by 2.8%, according to the Institute of Future Studies for Development.
Chotima Iemsawasdikul, Director of Thailand’s Trade Negotiations Department, stated that the FTA with the EU presents its own challenges. This agreement is comprehensive and of high standards, especially in the aspects of protecting intellectual property rights, competitiveness of state-owned companies, and market access for government procurement. These clauses represent new commitments for Thailand, which have never been adopted in previous free trade agreements.
Challenges also arise from the fisheries sector. The European Parliament passed a resolution stating that an FTA with Thailand could threaten the EU’s canned fish and seafood industry, which is a major source of economy and employment in coastal areas. Therefore, these negotiations need to accommodate the interests of both parties so as not to harm certain sectors.
Despite the challenges, Thailand is committed to engaging in productive discussions with the EU and seeking innovative solutions of mutual benefit. Thailand targets reaching an FTA agreement with the EU by 2025, which will strengthen Thailand’s economic position in the global market and diversify its trading partners. Thailand is working hard to complete free trade agreement negotiations with the European Union and other countries as part of its economic growth strategy. Despite facing challenges in meeting the EU’s high standards, especially in terms of intellectual property rights protection and government procurement market access, Thailand remains committed to reaching mutually beneficial agreements. This agreement is expected to significantly increase Thailand’s economic and trade growth, with the target of reaching an FTA agreement with the EU by 2025.
