Free trade agreements not only reduce import duties and eliminate tariffs on trade in goods, they are also an important catalyst for long-term investment and growth in participating countries. Most free trade agreements also have clauses that can help companies gain better market access and impose restrictions on the protection of their investments and intellectual property, while expanding business opportunities in terms of price competitiveness, market development and business, investment expansion and public procurement. According to the Ministry of Commerce, China (including Hong Kong) is by far Thailand`s largest trading partner, with a total trading value of $79 billion in 2015, with a trade value of $79 billion, followed by Japan with $51 billion and the United States with $38 billion. The other trading partners in the top ten are all Thailand`s neighbors in ASEAN and Asia-Pacific: Malaysia, Singapore, Indonesia, Australia and Vietnam. [i] [i] Trade Statistics, Ministry of Trade Negotiations: www.dtn.go.th/images/89/Trade/traderank1258.pdf [ii] www.doingbusiness.org/data/exploreeconomies/thailand/ Thailand`s average MFN tariff, applied in 2011, was 9.8%. While the average tariff on agricultural products is higher than that applied to non-agricultural products, high average tariffs have been applied for beverages and tobacco, clothing and fruits, vegetables and plants. Although Thai exporters have few trade barriers, the country`s high import tariffs, even applied to small domestic production, serve as trade barriers (Shiino, K. 2012). The country has imposed a number of regional trade agreements.
Among them, Thailand is a founding member of ASEAN, the third largest trading bloc in the world after the European Union (EU), which aims to become an ASEAN Economic Community (AEC) by 2015. During the process, ASEAN-6 member states, including Thailand, have eliminated almost all import duties, with a few exceptions, and other ASEAN-4 countries will introduce tariff reductions by 2015. Thailand also has bilateral trade agreements with Australia, India, Japan, Laos and New Zealand. Thailand`s free trade agreements sometimes involve bilateral and regional agreements. For example, trade between Australia and Thailand is governed by an agreement between the two countries and a pact between Australia and New Zealand and ASEAN, to which each country belongs. In addition to these rules, exporters must be able to accurately specify their product billings and understand their trade flows.