Financial Watch: Protectionism Hurts Thailand's Export Trade Innovation with Thailand and China
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In a presidential statement issued at the 34th ASEAN Summit in June this year, ASEAN leaders unanimously issued an early warning of the risks posed by trade protectionism and reaffirmed ASEAN's opposition to trade protectionism and support for the maintenance of the multilateral trading system. On the eve of the 35th ASEAN Summit, a number of Thai experts told reporters that trade protectionism and unilateralism have not only affected the momentum of economic growth in Thailand, but also have a negative impact on the entire Southeast Asian economy.
In late October, the United States announced the suspension of Thailand's GSP tariff treatment, involving Thai goods such as seafood and fruit juices, which made Thailand's export situation worse. But among the declining trade figures this year, Thai insiders have also found that innovations in Thai and Chinese trade, such as cross-border e-commerce cooperation, are bringing new highlights to Thai exports.
The country's economy has grown between 3 % and 4 % in recent years, with growth slowing markedly after 2019. According to data from the National Economic and Social Development Commission, the Thai economy grew by 2.8 % in the first quarter, 2.3 % in the second quarter, and only 2.6 % in the first half.
More worrying for the Thai economy, the trend is reversing: total Thai exports fell 4.2 per cent in the second quarter from a year earlier and 4.1 per cent in the first half from a year earlier. Among the main export commodities, rubber and its products, motor vehicles, petrochemical products, computer spare parts, rice, sugar, etc. have all decreased significantly.
The National Commission for Economic and Social Development of Thailand believes that rising barriers to international trade and the poor economies of some trading partners are the main reasons for the decline in Thai exports. The committee's secretary general, Tuoshapeng, said that trade protectionism has affected the Thai economy, causing declining exports, falling agricultural prices, and fewer tourists in Thailand.
Thailand is part of the global supply chain, and its commodity exports have been greatly affected by the rise in protectionism, a trade promotion agency expert from the Thai Ministry of Commerce said in an interview with reporters. Thailand's exports to ASEAN, Japan, the European Union and the Middle East fell across the board from January to September, according to the Ministry of Commerce.
In order to deal with the impact of global protectionism on the Thai economy, Thailand has found another way to export specialty products. Taking Thai fruit as an example, this year Thailand has made full use of China's huge market demand and complete e-commerce network, fruit exports to achieve negative growth.
Total Thai durian exports reached $817 million in the first half of this year, up 45 per cent from a year earlier, according to the Ministry of Commerce. Durian shipments to China totalled $425 million, up 70 per cent from a year earlier. During the same period, Thai bamboo exports to China reached 229 million U.S. dollars, accounting for 71 % of total bamboo exports, an increase of 408 % year-on-year.
According to a report issued by the Department of International Trade Negotiations of the Ministry of Commerce of Thailand, the rapid growth of fruit exports such as durian and mangosteen has benefited from the zero-tariff arrangement between Thailand and China under the ASEAN-China Free Trade Area.
In addition to the favorable zero-tariff policy, China's move to open wider to the outside world has also brought new opportunities for Thai fruit exports. Nuotapeng, assistant director of the kaitai research center, a Thai think-tank, says China has significantly increased the number of cities with new cross-boundary ecommerce integrated pilot zones, which have greatly boosted Thai fruit exports.
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