Thailand, EU Agree to Restart Free Trade Pact Negotiations

Thailand and the European Union have agreed to restart negotiations on a bilateral free trade deal that was frozen after the military seized power in a 2014 coup.

In a sentence yesterdayThe European Commission said senior officials from both nations will start talks in Thailand later this year to conclude an “ambitious, modern and balanced free trade agreement” by 2025. The negotiations will cover trade in goods and services, as well as the investment in key Thai industries where the EU wants to increase its share, such as renewable energy, electric vehicles and chip manufacturing.

“This announcement confirms the key importance of the Indo-Pacific region to the EU’s trade agenda, paving the way for deeper trade ties with the second largest economy in Southeast Asia and further strengthening the EU’s strategic engagement with this flourishing region,” said the Commission.

The meeting supposedly followed a virtual meeting between EU trade chief Valdis Dombrovskis and Thai trade minister Jurin Laksanawisit. The latter described the resumption of talks as a “historic day” for both sides, Nikkei Asia reported, and said they aimed to conclude a deal “within two years.” political quoted a European diplomat as if to say that negotiations are unlikely to start before September.

The EU suspended most cooperation with Thailand, including trade deal talks, in June 2014, a month after the military overthrew the elected government of Prime Minister Yingluck Shinawatra. At that time, the block voiced his “extreme concern” about developments in Thailand and stated that the military should restore “as a matter of urgency, the legitimate democratic process and the constitution, through credible and inclusive elections”.

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In October 2019, he decided to re-engage with the quasi-civilian government, still led by coup leader Prayut Chan-o-cha, which was formed after the March elections. This culminated in the signing of a long-awaited Partnership and Cooperation Agreement in December last year.

If signed, the Thailand-EU pact would be the third bilateral free trade agreement of the European bloc in Southeast Asia after the agreements signed with Singapore in 2013 and vietnam in 2020. Both reflect Brussels’ desire to strengthen its engagement with the “Indo-Pacific” in general and Southeast Asia in particular, in part to diversify its economic commitments beyond China.

According to the Commission, the EU is currently the country of Thailand fourth largest trading partner, while Thailand is the EU’s fourth largest trading partner in Southeast Asia. Two-way merchandise trade amounted to USD 44.5 billion in 2022, while services trade amounted to another USD 8.4 billion in 2020. 14 percent of Thailand’s foreign direct investment (FDI). The EU, on the other hand, comprises one tenth of the FDI to Thailand. A deal would likely elevate the two nations’ intermediate economic partnership to leading status in the region.

At the same time, the EU’s position reflects the tension between its objective of leveraging its economic weight to achieve progressive change and its strategic interest in strengthening relations with a strategically important but politically illiberal region. In 2020, in the context of the EU-Singapore Free Trade Agreement, two academics have identified “tensions in the EU’s external relations between hardcore business interests, on the one hand, and its fundamental norms expressed in what we call policies or value-based interests, including human rights, on the other hand.”

The recent rapprochement of the EU with Thailand demonstrates this well. While the 2019 elections ended a period of military dictatorship, giving Brussels a chance to restart cooperation, in many ways it simply reconstituted military rule behind a civilian façade. Given the current military might and the frequency of military interventions in Thai politics since 1932, its influence is also likely to persist for the foreseeable future, to the detriment of Thai democracy. As such, any EU deal with Thailand will have to find a way to accommodate this reality, either by abandoning human rights conditions or by watering them down to the point where they can be easily circumvented. And this is not to mention the human rights trade-offs involved in the free trade agreement negotiations with the one-party country, Vietnam.

As China becomes a more pressing concern for European leaders, it is clear that the balance between values ​​and interests is increasingly tilting towards the latter.

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