UK government inks first trade pact with Thailand
The tie-up will tackle issues such as digital trade and clean growth, and aim to boost trade between the countries, which is already worth £5.9 billion a year
THE UK government has agreed to boost trade and investment with Thailand, to ease barriers to the flow of goods and services between the two countries. This is the Labour Party’s first such deal since coming into office.
The tie-up was completed by UK Trade Minister Douglas Alexander and Thai Commerce Minister Pichai Naripthaphan in Bangkok on Wednesday (Sep 18). They committed towards removing specific barriers to trade, focusing on areas such as technology, customs and standards. The deal does not include broad measures such as tariff cuts.
The Labour Party aims to use trade to encourage economic growth, after Chancellor of the Exchequer Rachel Reeves bemoaned the UK’s fiscal position. She said her Conservative predecessors left a £22 billion (S$37.6 billion) hole in the public purse.
Ahead of the UK’s July election, the Labour Party vowed in its campaign to focus on smaller trade deals in areas of strength. The more ambitious free trade agreements chased by the previous government either failed to materialise or took years to complete.
Deals such as the partnership between the UK and Thailand are “exactly the sorts of small things the UK government needs to be doing”, said David Henig, director at the European Centre for International Political Economy.
“But they also need to ensure there is implementation – too often there is no follow-up,” the director added.
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Britain has struck sectoral side deals with Thailand, including a recent agreement by the Asian nation to accept the UK’s vehicle emissions testing standards. This removes the need for imported cars to be tested again under Thai standards, saving UK car manufacturers “millions of pounds”.
A similar agreement for motorbikes is being discussed, said the UK Department for Business and Trade.
In a separate recent deal, Thailand allowed UK food and drink manufacturers to submit conformity documentation by e-mail, rather than having to get paperwork physically stamped by the British Embassy, a move worth as much as £70 million to UK businesses over five years.
New and existing working groups tackle will tackle similar issues in areas such as digital trade and clean growth as part of Wednesday’s trade pact. Trade between the UK and Thailand, South-east Asia’s second-largest economy, is already worth £5.9 billion a year.
Debra Crew, chief executive at drinks company Diageo, which owns brands such as Johnnie Walker whisky, said in the UK government release that she hoped the “enhanced partnership will be the first step towards resolving costly trade barriers”.
While in Asia, Alexander will also attend a summit of Asean economy ministers in Laos, where he is expected to speak to other ministers about the UK’s trade plans.
Earlier this week, he also accompanied Business and Trade Secretary Jonathan Reynolds to Saudi Arabia to meet Gulf state officials for trade and investment talks.
The previous Conservative Party government looked to sign a free trade agreement with members of the Gulf Cooperation Council, but was unable to complete negotiations before being voted out of power.
The Tories also failed to complete a new deal with India, which Labour is now picking up, and gave up free trade agreement talks with Canada. BLOOMBERG
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