How Do FTAs Affect Exporting Firms in Thailand?

Ganeshan Wignaraja, Rosechin Olfindo, Wisarn Pupphavesa, Jirawat Panpiemras and Sumet Ongkittikul
Additional contact information
Rosechin Olfindo: Asian Development Bank Institute
Wisarn Pupphavesa: Asian Development Bank Institute
Jirawat Panpiemras: Asian Development Bank Institute
Sumet Ongkittikul: Asian Development Bank Institute

No 190, ADBI Working Papers from Asian Development Bank Institute

Abstract: Thailand-an outward-oriented regional production hub-is one of East Asia's most active users of free trade agreements (FTAs) as an instrument of commercial policy. By December 2009, Thailand had 11 concluded FTAs, and more were either under negotiation or proposed. Thai trade negotiators have striven to secure market access via FTAs, but little is known on how FTAs actually affect exporting firms. A survey of 221 exporters in leading sectors forms the basis for the first systematic study of the business impact of FTAs in Thailand. Key findings are as follows: (i) 24.9% of respondents used Thai FTAs as of 2007-2008, and this figure seems set to rise; (ii) 45.9% of respondents said that FTAs had influenced their business plans; (iii) 26.2% of firms felt that dealing with multiple rules of origin adds to business costs, and this is estimated to be less than 1% of export sales; (iv) more than half the sample firms have consulted with government and business associations on FTAs; and (v) a significant demand existed for business development services to adjust to FTAs, particularly for small and medium enterprises (SMEs). The findings suggest that Thailand should refine its FTA strategy to take better advantage of regional trade agreements. The study concludes with specific recommendations to improve business awareness of FTAs, encourage greater utilization of FTA preferences, increase competitiveness of local firms, and mitigate the potential effect of multiple rules of origin.

Keywords: thailand fta impact; thailand afta business; thailand economy ftas (search for similar items in EconPapers)
JEL-codes: F10 F15 O24 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2010-01-29
New Economics Papers: this item is included in nep-int and nep-sea
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Citations: View citations in EconPapers (6)

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