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Thailand and S. Korea to start economic partnership talks this year

The Star | 28 March 2024

Thailand and S. Korea to start economic partnership talks this year

BANGKOK: Thailand and South Korea are opening negotiations for an economic partnership agreement (EPA) to pave the way for a free trade deal between the two countries by late 2025 or early 2026, Commerce Minister Phumtham Wechayachai said on Thursday (March 28).

He voiced confidence that the bilateral free trade agreement (FTA) would help boost Thailand’s competitiveness in the global market while drawing in more investments from South Korea in such areas as electric vehicle manufacturing and information technology.

“The Republic of Korea calls this agreement with their trading partners EPA, although it is in fact an FTA,” Phumtham, who is also deputy prime minister, said.

He added that the trade pact with South Korea would be built on the kingdom’s existing multilateral trade partnerships with the East Asian country under the Asean-Korea Free Trade Agreement (AKFTA) and the Regional Comprehensive Economic Partnership (RCEP).

In addition to increased competitiveness for Thailand and more investment from South Korea, the commerce minister expected the FTA to facilitate more cooperation between the two countries in such areas as supply chain and digital economy.

Phumtham was speaking to reporters after a signing ceremony on EPA negotiations, attended by Chotima Iemsawasdikul, director-general of the Ministry of Commerce’s Department of Trade Negotiations, and Roh Keon-ki, deputy minister for trade negotiations from South Korea’s Ministry of Trade, Industry and Energy.

“This is the official start of negotiations for an FTA between Thailand and South Korea. Both sides expect the first round to start by the middle of 2024 and aim to complete the negotiations by the end of 2025 or early 2026,” Phumtham said.

He added that this was the first FTA negotiations by the Srettha government with a foreign country under its policy of expanding overseas markets and attracting more foreign investments through FTAs.

Among Thai products expected to benefit from an FTA with Korea are meat and fishery products (such as frozen and processed chicken meat and frozen and processed seafood), tropical fruits (such as mangoes, guava and mangosteen), other food products (such as flour, sauces and condiments), wood products (such as processed lumber, particleboard and plywood), and chemical products, according to the commerce minister.

He said more Thai service businesses are expected to enter the South Korean market, including transportation, warehousing, hotels, and restaurants.

Phumtham said he had learned from South Korea’s ministry that Thailand was regarded as one of the targeted countries with high potential for its bilateral EPAs.

“[South] Korea has invested tens of billions [of baht] in our country, including Samsung electrical appliances, KIA cars, and electronic appliances. We welcome their interest in expanding the market here,” Phumtham said.

Last year, South Korea was Thailand’s 12th largest trading partner with a trade value of US$14.7 billion (536 billion baht).

Thai exports to South Korea totalled $6 billion, which included refined oil, rubber products, sugar, electrical circuit boards, and aluminium products.

Thailand imported $8.6 billion worth of products from South Korea last year, including iron and steel products, electrical circuit boards, chemicals, and machinery and components.

Through the EPA, Thailand and South Korea agreed to push for negotiations in areas of mutual interest, including economic cooperation, digital, and government procurement, and attain a high level of market access to goods and services, the Korea Economic Daily reported on Thursday.

According to the South Korean government, the South Korea-Thailand EPA is expected to: increase bilateral trade in automobiles, electric vehicles and car parts; create opportunities in construction, manufacturing, and visual and auditory service markets; strengthen economic cooperation in supply chains, bio, and clean economy; and build forward-looking strategic trade relations between the two countries, the report said.

The agreement will create new market opportunities in the Asean region to facilitate the spread of Korean culture and foster deeper cooperation in crucial fields like supply chain, biotechnology, and clean economy, the report quoted Roh as saying.

The two countries have completed all required procedures for launching the negotiations and plan to hold the first official round of talks in the near future, once prior consultations make headway in the first half of this year, according to South Korean media.

 source: The Star