Bangkok, 8 August 2022 (TDI): The Regional Comprehensive Economic Partnership (RCEP) is anticipated to boost Thailand’s financial cooperation with its major Asian trading allies.
The economic deal will aid in promoting the nation’s commerce with East Asia, particularly with South Korea and Japan.
According to the ASEAN briefing, “The RCEP is expected to boost Thailand’s trade and investment with its major Asian trading partners.”
The #RCEP is expected to boost #Thailand‘s trade and #investment with its major Asian #trading partners.
Identify the key impacts that RCEP will have on Thailand’s position in regional trade below 👇👇https://t.co/zfk4xSjQiI pic.twitter.com/FHUYjpCj1V
— ASEAN Briefing (@ASEANBriefing) August 8, 2022
Thailand’s administration is hoping that the RCEP would assist the nation’s economy to revive despite the strains of COVID-19 and rising inflation meanwhile assisting Thailand in becoming a more competent trade associate.
According to Thailand’s Ministry of Commerce, 29,891 of the 39,366 commodities that would be subject to cost-concessions under RCEP will be included in the agreement’s initial application.
South Korea offers 11,104 articles, Japan has 8,216, China has 7,491, New Zealand has 6,866, and Australia has 5,689 in contrast.
The RCEP also creates mechanisms for coordination in finance and trade, notably concerning e-commerce and copyrights.
Thus, as the RCEP has the potential to boost investment and commerce with Thailand’s important Asian Pacific trading partners, it will assist in reducing tariffs between signatory countries by 91 percent.
Some of these reductions would take place right away during the agreement’s first phase, whereas others will be implemented incrementally in 2 decades.
RCEP’s Framework for Assistance
Thailand heretofore has open trade accords in place with China, Japan, and South Korea, thus these nations consented to further reduce their tariffs for Thailand as part of the RCEP discussions.
As a consequence of the agreement, imports of Thai goods are expected to ascend in China, Japan, and South Koreas markets, among other nations.
In addition to it, the agreement assures that China will accept 653 Thai products into its commerce, up from 33 in prior discussions.
Over 16 years, Japan will reduce customs on vegetables (including tomatoes, beans, asparagus, and garlic powder). Within 10 to 15 years, South Korea will eliminate the 45 percent levy on fresh, dried, and frozen fruit.
However, Thailand’s e-commerce market is still relatively juvenile when contrasted to numerous other Asian nations, which poses logistical complications for companies who sell their articles via these platforms.
As proposed in a bottom-line by far, Thailand will gain a lot from the RCEP’s increasing commerce, yet it also has to contend with more intense rivalry from other member nations.
As Thailand’s exports to countries like Japan, and South Korea are expected to rise, there is a chance that the commercial imbalance with these nations, particularly China, may widen.
Therefore, companies with their investments in Thailand would be wise to review how they are currently operating.
