Exports face higher trade barriers

Gianni Zanini, co-author of World Bank's annual trade survey, said yesterday in Bangkok that trade pacts are important especially for Thailand.

The share of exports to trade partners with whom Thailand has free-trade or customs agreements was 56 per cent in 2006, but Malaysia, Singapore and China face lower trade barriers, he said.

If textile and garments face high barriers, the country can use bilateral trade talks to lower the barriers.

However, for farm products, Thailand needs to push for a better agreement under the Doha Round of the multilateral World Trade Organisation (WTO).

Members of the WTO may reach agreement on tariff cuts on farm items this year, but they may not reach a consensus on the liberalisation of service sectors.

Thailand's duties have been reduced to slightly below the East Asia and Pacific regions.

Thailand also enjoys high rankings on institutional and business climate as well as trade facilitation.

The growth of exports held up even when the economies of the country's principal export markets such as the United Sates slowed down.

The country could export more to non-traditional markets such as Middle East and Russia.

Thailand's strength also relies less on concentrated export products.

The export mix is more diverse than its neighbours, such as Malaysia, Vietnam, Indonesia, China and Cambodia. Its export concentration index from 2006-2007 is at the bottom compared with these countries.

The World Trade Indicators found that real trade growth was high for most countries, including Thailand, between 2000-2004, but growth slowed last year in many countries.

Countries with lower tariffs have higher merchandise trade integration while countries with better regulatory quality have stronger export diversification.

Those with a better business climate are more integrated and have higher manufacturing share in exports, he added.

The indicators cover 210 economies and used data between 1995-2007.