In a recent announcement, Suchat Chomklin, the Deputy Minister of Commerce of Thailand, revealed promising news regarding the country’s export growth for the year 2024. He stated that the Thai government has directed the Department of International Trade Negotiations to closely monitor trade developments, particularly with countries that have established Free Trade Agreements (FTAs) with Thailand. The total trade value between Thailand and these FTA partners has reached $360.34 billion, marking a 5% increase from 2023. Notably, exports to these countries amounted to $172.046 billion, reflecting a 3% growth.
Countries that have shown significant growth in exports include Peru, with a remarkable 33% increase, followed by India at 16%, New Zealand at 13%, China at 3%, Chile at 3%, and ASEAN countries collectively at 5%. Within ASEAN, Cambodia's exports surged by 43%, Laos by 6%, Vietnam by 5%, Malaysia by 3%, and Singapore by 1%.
“FTAs play a crucial role in driving Thailand’s trade economy and enhancing competitiveness for Thai farmers and businesses in the global market,” Suchat emphasized. He also projected that exports will continue to expand in 2025, supported by a recovering global trade environment, rising agricultural prices, and increasing demand for food security.
Currently, Thailand has 14 FTAs in effect with 18 countries, and the FTA with Sri Lanka, the 15th, is expected to take effect by March 23, 2025. Additionally, on January 23, 2025, Thailand signed an FTA with the European Free Trade Association (EFTA), marking its first trade agreement with European nations.
Chotima Iamsawatkul, the Director-General of the Department of International Trade Promotion, provided further insights into the export situation. She noted that the industrial goods sector exported to FTA partners has shown robust growth, with a total value of $127.603 billion, representing a 4% increase and accounting for 54% of Thailand's industrial exports. Key products driving this growth include jewelry and ornaments, which expanded by 48%, aluminum products by 23%, machinery and parts by 14%, and computers and components by 13%.
Despite the overall positive trend, exports of agricultural and processed agricultural products to FTA countries faced slight declines, with agricultural goods down by 0.5% and processed goods by 1%. This downturn was attributed to climate change effects, such as drought, impacting agricultural yields, as well as economic slowdowns in partner countries. However, several agricultural products still performed well, including coffee (105% increase), spices and herbs (49%), rubber (30%), canned and processed fruits (22%), cocoa and preparations (17%), soups and seasonings (14%), and wheat products and prepared foods (10%).
Thailand remains the top exporter of agricultural products in ASEAN and ranks eighth globally. It is also the third-largest exporter of processed agricultural products in ASEAN, following Indonesia and Malaysia, and ninth globally.
Looking ahead, the Department of International Trade Promotion plans to accelerate FTA negotiations with key partners, including the European Union, Canada, South Korea, and Bhutan. They aim to explore new markets, including Bangladesh, the United Kingdom, the Eurasian Economic Union (EAEU), the Pacific Alliance, and the Southern Common Market (MERCOSUR).
In a related development, the Export-Import Bank of Thailand (EXIM Bank) has outlined four strategies for Thai exporters to prepare for potential challenges posed by reciprocal tariffs from the United States. Despite the U.S. delaying the implementation of these tariffs by 90 days, the EXIM Bank warns that the situation remains a significant risk factor for Thai exporters.
The EXIM Bank has highlighted the need for exporters to brace for a worst-case scenario, given the potential economic slowdown globally. The bank’s research indicates that the U.S. has postponed the enforcement of reciprocal tariffs until July 9, 2025, allowing countries, including Thailand, time to negotiate.
Currently, global financial markets are experiencing high volatility due to uncertainties surrounding U.S. policies, affecting stock prices, currency values, and safe-haven assets like gold. The Volatility Index (VIX) has surged, while the U.S. Dollar Index has weakened, prompting Thai exporters to adopt more cautious risk management practices regarding exchange rates.
In the meantime, Thai exports have benefited from a phenomenon known as “panic buying,” where importers rush to purchase goods ahead of anticipated price increases after the tariffs take effect. This trend has contributed to a 145% increase in Thai exports to the U.S. during April and May 2025, particularly in sectors such as computers and components, household electrical appliances, and communication devices.
However, the EXIM Bank cautions that this surge may not reflect genuine demand, and a sudden drop in purchasing could occur as market conditions stabilize. Furthermore, the International Monetary Fund (IMF) has revised its global economic growth forecast for 2025 down to 2.8% from 3.3%, while the World Trade Organization (WTO) predicts a contraction in global trade by 0.2% instead of the previously expected growth of 2.7%.
In light of these developments, the EXIM Bank has advised Thai exporters to focus on four key strategies: 1) Maintain close communication with trading partners to gauge potential impacts and confirm shipments; 2) Utilize risk management tools such as Foreign Exchange Forward Contracts; 3) Explore new markets, particularly in ASEAN and the EU; and 4) Stay informed about tariff implications and seek expert advice.
Additionally, the EXIM Bank is ready to collaborate with Thai exporters by providing risk management solutions, export insurance, and financial products that support export activities and market entry. They also offer an Export Clinic to provide timely information and guidance to help exporters navigate the evolving trade landscape effectively.
