6 Recently Updated Thai Ftas And Their Impact On Thai Business Law
Thailand is a country of many enticing characteristics for Western businesses
. There is a consistently low cost of production and cost of operation in Thailand compared to the West. Thailand offers way to become familiar with the Asian market, both geographically and culturally. Thailand also has a wide consumer base, both in the form of tourists and locals, and a strong agriculture sector where many countries are struggling to provide their own food.These benefits have given the country quite a bit of negotiating power in free trade agreements that have been negotiated under Thai business law. So much mutual benefit has been realized that a new Peruvian FTA will soon be in place, Here, law firms in Thailand look at the impact on Thai business from 4 of the major FTAs that are currently in place worldwide.
1. Thai-ASEAN FTA
Thailand's closest business partners come from the Association of Southeast Asian Nations - these transactions are governed by Thailand's oldest standing FTA from 1992, which became effective in 1993. Far more than any other single Thai business law, the AFTA has successfully integrated the economies of its members into a 550 million-strong production base, where tariffs have been reduced to between 0% and 5%.
Thai businesses in computing, parts and accessories, and automobiles, parts and components are those that have so far seen the greatest gain from the AFTA according to law firms in Thailand.
2. Thailand-Australian FTA
Australia is one of our closest geographical FTA neighbors, apart from the ASEAN countries. This part of Thai business law is due to come to fruition in January 2010, after a five-year staging process where tariffs were slowly removed.
They will be effectively taken back to zero in the next few months. The FTA was Thailand's first with a developed country, perhaps one of the reasons why such a long period was sought before the full benefits of the FTA under Thai law could be realized by businesses. Thailand's auto exports to Australia surged by 55% in the first four months after the 5% import duty was abolished
3. Thailand-India FTA
Another geographically close free trade partner, Thailand's business law free trade agreement with India has been in place for several years now, with significant economic benefits. 82 agricultural products and industrial items have had their tariffs reduced by 50%. The industries that have most benefited from this Thai law on free trade with India include gem dealers and jewelry makers, electrical appliances, auto parts and furniture.
4. ASEAN-China FTA
This is often hailed as the biggest change in Thai business law in recent memory - the free trade agreement created the world's largest free trade area, numbering around 1.7 billion consumers. It produces US$2 trillion in regional gross domestic product. All these big numbers have mostly had an effect in the medical equipment, plastics, biochemical and tapioca industries in Thailand.
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