Change in focus offsets impact from trade war 

Economy July 23, 2018 01:00

By THE NATION

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THE TRADE war between the US and China is expected to have only a slight impact on Thailand, according to Federation of Thai Industries (FTI) vice chairman Montri Mahaplerkpong.



Despite the trade retaliation between US and China during the last four months, Thailand’s exports have continued to grow every month. Montri attributed that to the country’s shift in focus away from mainly exporting electronic and automotive components to be assembled in China and the US and instead to mainly exporting them to Asean and European markets.

If US companies want to seek new product manufacturing locations to replace China, they are expected to seek them in Asean, which is emerging as the world’s production hub. This will benefit Thailand and other Asean bloc countries, with Thailand boasting the largest production hub in the region.

Montri added that the Thailand trading structure has also changed from focusing on mainly exporting to other regions, to exporting and importing products and components from within Asean members. That has enabled the country to cushion the impact from the US-China trade war.

On a concern that China will dump its products in Thailand after failing to export them to the US, he believes that China will be able to absorb its own supply glut within the next few years, thanks to the country’s economic expansion of over 7 per cent per year.

The FTI has already assigned its academic unit to study the possible impact of a US-China trade war on Thailand.

In a separate matter, he added that the private sector has made known its opinion at the Joint Standing Committee on Commerce, Industry and Banking, to support Thailand entering the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) free-trade agreement.

The pact is expected to consider granting the new membership during the second quarter of next year.

 

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