Thailand eyes EU free trade deal by year end amid US tariff risk

[BANGKOK] Thailand wants to wrap up talks with the European Union on a long-awaited free trade deal by the end of the year as it seeks to reinforce economic security amid potential tariff risks from the US, an official said.

Bangkok shares the view with the EU, Thailand’s fourth largest trading partner, that the pact has become paramount in an uncertain geoeconomic climate, Commerce Minister Pichai Naripthaphan said on Friday (Mar 14). The two sides resumed negotiations in 2023 after they were suspended by the EU in the aftermath of Thailand’s 2014 military coup.

“The Thai-EU FTA (free trade agreement) will not just boost trade, but will be a big step in building the strength of the Thai economy,” Pichai said. “It will be a key to building economic security and help Thailand adjust better to global competition.”

South-east Asia’s second-largest economy is heavily reliant on exports, which make up about 60 per cent of Thailand’s gross domestic product. Business groups have warned its widening trade surplus with the US – at about US$35 billion last year – could make it a target of reciprocal tariffs by the Trump administration. That would put more than US$55 billion worth of annual exports to the US at risk.

Pichai said Thailand would like to speed up its negotiations with the EU and hopes to finalise negotiations by Christmas. A fifth round of talks will be held over five days from the end of March.

Earlier this year, Thailand signed a FTA with the European Free Trade Association, an inter-governmental body made up of Iceland, Liechtenstein, Norway and Switzerland. Thailand is also pursuing free trade deals with the United Arab Emirates, Bhutan, Turkey and Pakistan. BLOOMBERG