Preference Utilization under Thailand’s FTAs: Agricultural and Related Export Products
* The views expressed in this paper are those of the authors and do not necessarily reflect the views of TDRI. This study, conducted as part of the Trade Analysis and Reform Project (TARP), was carried out with the aid of a grant from the Australian Agency for International Development (AusAID) The authors may be contacted at email@example.com, firstname.lastname@example.org, or email@example.com
In 2006, Thailand adopted five free trade agreements with its trading partners; namely, ASEAN FTA (AFTA), ASEAN-China FTA (ACFTA), Thailand-Australia FTA (TAFTA), Thailand-New Zealand CEP (TNZCEP), and the early harvest scheme between Thailand and India. Concerning trade in goods issue, these FTAs are expected to bring about benefits to Thai exporters by providing cost advantages to Thai products. Previous studies by TDRI (2006) and TDRI (2008) elucidated that a number of Thai businesses do not fully utilize the existing preferential arrangements. However, the studies focused on only the businesses in the industrial sector. This study will focus on preference utilization by Thai businesses in the agricultural sector.
The objective of this study is to examine the extent of benefits that Thai agricultural businesses exporting the products under the HS 01-24 and 4001 in 2006 gained from the existing FTAs (AFTA, ACFTA, TAFTA and the early harvest scheme between Thailand and India) and identify possible causes leading to the low preference utilization rates for certain major export products. After that the research team provides policy recommendations necessary for enhancing preference utilization and overall benefits from the FTAs for Thailand’s agricultural sector. The study captures the overall extent of benefits by calculating the proportion of tariff saving to total trade value, which is calculated as the result of the interaction of the three key factors; product coverage, preferential tariff margin, and preference utilization rate.