Chile FTA expected to boost Thai exports
Pact set to come into effect this year after Cabinet nod
The Thailand-Chile Free-Trade Agreement would go into effect by the fourth quarter after Parliament endorsed the pact on Tuesday.
"The implementation should substantially promote Thai exports and investment to Chile and other Latin American markets as Chile has many bilateral trade deals with other nations. This FTA should be an efficient springboard for Thailand to penetrate other markets," Piramol Charoenpao, director-general of the Trade Negotiations Department, said yesterday.
The TCFTA becomes the second bilateral pact with a Latin American country after Peru and the seventh with trading partners.
This FTA will result in a big boost in two-way trade as each nation is committed to cutting duties on more than 90 per cent of trade in goods. Investment is expected to grow significantly as Chile has allowed Thailand to invest easily in services with up to 100-per-cent ownership.
Chilean investors have also eyed various industries in Thailand to capitalise on its strategic location for expanding to other Asean markets under regional integration.
Since Thailand and Chile consider each other as a regional gateway, the FTA should greatly push trade and investment between both sides.
Thai goods with high export potential are pickup trucks, cement, electric appliances, plastic pellets, rubber products, and canned and processed foods. Services and investment with opportunities to grow in Chile are engineering, logistics, energy, mining and retailing.
Expanding investment between the two partners will help eliminate distance barriers, facilitate logistics and cut transport costs in the long run.
Chile is Thailand's third-largest trading partner in Latin America, after Brazil and Argentina. Trade between Thailand and Chile was worth US$978.43 million last year. Thailand enjoyed a trade surplus with Chile of $278.07 million. Shipments from Thailand were up by 21.05 per cent to $628.25 million last year, while imports from Chile dropped by 2.1 per cent to $350.18 million.
The negotiations kicked off in April 2011 and were completed last August with the goal of laying down a comprehensive framework to liberalise trade in goods and services and to open up investment.