Thailand’s opportunities and challenges toward EU-ASEAN FTA

Abstract

The negotiation of the EU and ASEAN FTA has started in year 2007, Thailand as an ASEAN member will certainly be affected by the agreement both positively and negatively. The objective of this study is to analyze its impact on Thailand. The study is divided into two parts, the quantitative and qualitative analyses. The quantitative analysis employs the GTAP model with two different simulations; the elimination of all tariffs on trades between EU and ASEAN (SIM1) and the elimination of all tariffs on trades between the two regions except agricultural goods (SIM2). In-depth interviews with relevant government officers, experts, and producers provide information for qualitative analysis The results of quantitative analysis show that Thailand gains in GDP, welfare, per capita utility, terms of trade, exports, imports, outputs and production factors both scenarios. But the total exports of Thai agricultural goods to the world markets have declined except to the EU. Moreover, the processed agricultural goods have increased dramatically, particular in the EU market. The quantitative analysis with the in-depth interview confirms the quantitative results.