Domestic and Foreign Market Access

Overview: Trade Policy and Business Environment

The Kingdom of Thailand is classified as an upper middle income country in Southeast Asia. The country was ranked 57th out of 132 in the World Economic Forum (WEF) Enabling Trade Index (2012), which measures institutions, policies and services to facilitate trade in countries. Despite the financial crisis, natural disaster, and political turmoil, the country has maintained a resilient and open economy, especially as a member of the Association of South East Asian Nations (ASEAN). The country’s efficiency of import-export procedures and attractive feature to foreign investors is a competitive edge, whereas the country has still imposed high import tariffs and restricted market entry. The country’s national strategy aims at strengthening competitiveness in international markets by increasing its productivity and preparing for regional economic integration (WEF 2012).  

WEF, 2012, Global Enabling Trade Report

INDICATOR, UNITS RANK/132 SCORE
Domestic Market Access The pillar assesses the level and complexity of a country’s tariff protection as a result of its trade policy. This component includes the effective trade-weighted average tariff applied by a country, the share of goods imported duty free and the complexity of the tariff regime, measured through tariff variance, the prevalence of tariff peaks and specific tariffs, and the number of distinct tariffs. 113 3.75
Foreign Market Access The pillar assesses tariff barriers faced by a country’s exporters in destination markets. It includes the average tariffs faced by the country as well as the margin of preference in destination markets negotiated through bilateral or regional trade agreements or granted in the form of trade preferences. 12 4.00
Tariff rate (%) This indicator is calculated as a trade-weighted average of all the applied tariff rates, including preferential rates that a country applies to the rest of the world. The weights are the trade patterns of the importing country’s reference group (2012 data). An applied tariff is a customs duty that is levied on imports of merchandise goods. 81 6.82
Complexity of tariffs , index 1-7 (best) This indicator is calculated as the average of the following indicators: Tariff dispersion, Specific tariffs and Number of distinct tariffs. See description of each individual indicator for more details. Prior to averaging, values for each indicator were transformed to a 1–7 score, using the min-max method. 104 4.17
Tariffs dispersion (standard deviation) This indicator reflects differences in tariffs across product categories in a country’s tariff structure. The variance is calculated across all the tariffs on imported merchandise goods, at the 6-digit level of the Harmonized Schedule. 112 12.29
Tariffs peaks (%) This indicator is the ratio of the number of tariff lines exceeding three times the average domestic tariff (across all products) to the MFN (most-favoured nation) tariff schedule. The tariff schedule is equal to the total number of tariff lines for each country. These tariffs are revised on a yearly basis. 73 5.12
Specific tariffs (%) This indicator is the ratio of the number of Harmonized System (HS) tariff lines, with at least one specific tariff, to the total number of HS tariff lines. A specific tariff is a tariff rate charged on fixed amount per quantity (as opposed to ad valorem) 135 11.48
Number of distinct tariffs This indicator reflects the number of distinct tariff rates applied by a country to its imports across all sectors. 106 848.00
Share of duty-free imports (%) Share of trade, excluding petroleum, that is imported free of tariff duties, taking into account MFN tariffs and preferential agreements. Tariff data is from 2013 or most recent year available and imports data is from 2012 104 29.92
Tariffs faced (%) This indicator is calculated as the trade-weighted average of the applied tariff rates, including preferential rates that the rest of the world applies to each country. The weights are the trade patterns of the importing country’s reference group (2012 data). A tariff is a customs duty that is levied by the destination country on imports of merchandise goods 6 4.30
Index of margin of preference in destination markets, 0-100 (best) This indicator measures the percentage by which particular imports from one country are subject to lower tariffs than the MFN rate. It is calculated as the average of two components: 1) the trade-weighted average difference between the MFN tariff and the most advantageous preferential duty (advantage score), and 2) the ratio of the advantage score to the trade-weighted average MFN tariff level. This allows capturing both the absolute and the relative margin of preference. 62 31.24
Source : World Economic Forum, Global Enabling Trade Report 2014

Trade Policy and Market Access

 Thailand’s simple average MFN tariff applied in 2011 was 9.8%. While the average of applied tariff on agricultural goods is higher than that on non-agricultural goods, the high average tariff was imposed on beverage and tobacco, clothing, and fruits, vegetables, and plants. Even though Thailand’s exporters enjoy few barriers to their exports, the country’s high import tariffs, which are even applied to a small domestic production, serve as an impediment to trade (Shiino, K. 2012). The country has enforced a number of regional trade agreements. Among them, Thailand is a founding member of ASEAN, the world's third-largest trading bloc after the European Union (EU), which aims to turn into an ASEAN Economic Community (AEC) by 2015. During the process, the original ASEAN-6 member countries including Thailand eliminated almost all import duties with some exceptions and the remaining ASEAN-4 countries will implement tariff reduction by 2015. Thailand also concluded bilateral trade agreements with Australia, India, Japan, Laos, and New Zealand. Thailand's free-trade agreements sometimes simultaneously involve bilateral and regional deals. For example, Australia-Thailand trade is governed by an agreement between the two countries as well as a pact between Australia-New Zealand, and ASEAN in which each is a member.

Shiino, K., Bangkok Research Center, 2012, Overview of Free Trade Agreements in Asia

WTO, 2013, Tariff Profile (Thailand)

WTO, 2011, Trade Policy Review (Thailand)

Standard Compliance and Other Relevant Import/Export Restrictions

With respect to technical barrier to trade requirement, Thailand is an active participant in international and regional standard organizations such as International Organization for Standardization, the Pacific Area Standards Congress, and the ASEAN Consultative Committee for Standards and Quality. Whilst Thailand concluded several plurilateral mutual recognition agreements, the ASEAN Trade in Goods Agreement concluded by ASEAN countries obligates that members should apply technical regulations in a way that facilitates the implementation of any ASEAN sectoral mutual recognition arrangements (World Bank 2011). Moreover, as a major exporter of agricultural and fisheries products, sanitary and phytosanitary issues are of serious concern for Thailand. It generally follows standards set by the World Organisation for Animal Health (OIE), Codex Alimentarius, and the International Plant Protection Convention. However, it has also been reported that animal health standards are sometimes stricter than those established by OIE. (WTO 2011).
 

World Bank, 2011, TBT and SPS Measures, in Practice

WTO, 2011, Trade Policy Review (Thailand)