Business Korea - 23 September 2025
Thailand-Korea CEPA negotiations enter final stages
By Jung Min-hee
As the U.S.-initiated trade war intensifies pressure on Korea’s key export industries such as automobiles and steel, the government is accelerating its efforts to conclude negotiations for a Comprehensive Economic Partnership Agreement (CEPA) with Thailand as early as this month, aiming to pioneer new markets. As Thailand is the second-largest economy in ASEAN by GDP and considered a promising future market, the conclusion of the CEPA is expected to yield significant export growth effects.
The Ministry of Trade, Industry and Energy announced on Sept. 22 that the 7th Official Negotiations for the Korea-Thailand CEPA would be held in Seoul over four days until Sept. 25. The CEPA is a form of free trade agreement (FTA), with the two countries having initiated their first round of negotiations in July last year. Initially aiming for an economic partnership agreement (EPA), the agreement’s name was expanded to CEPA last month to reflect the comprehensive economic cooperation discussed during negotiations, including supply chains, SMEs, tourism, health, labor, and environment.
Both sides plan to continue discussions in seven areas, including goods, services, investment, digital, and finance during this 7th round of official negotiations. Notably, the Korean side is requesting market opening for automobiles, steel, and home appliances, while Thailand is seeking access to wood and agricultural products markets, including particle board (PB), shrimp, and mangoes. Although the 2007 Korea-ASEAN FTA eliminated tariffs on many items exported to Thailand, some products such as automobiles, steel, and home appliances still face high tariffs.
In particular, automobile tariffs remain at 40-64%, effectively minimizing export performance. According to the Korea International Trade Association, last year’s automobile exports to Thailand amounted to $43 million (approximately 59.9 billion won), accounting for only 0.5% of total exports ($7.678 billion). This contrasts sharply with the Thai electric passenger car market, where Chinese products benefiting from zero tariffs through FTAs, such as BYD, MG, Neta, and Dfsk, account for over 70% of the market share. The government aims to negotiate a reduction in automobile tariff rates to the level of Japan (20%), if not immediately to China’s level.
Moreover, the government intends to conclude negotiations between the two countries in this 7th round. A government official stated, “While it’s difficult to predict the outcome of the negotiations, we aim to finalize them in the 7th round. We will then strive to expedite the agreement’s entry into force through official procedures.” Considering the remaining steps, including legal reviews by the Ministry of Trade, Industry and Energy, Ministry of Foreign Affairs, and Ministry of Government Legislation, approval by the State Council, signing of the agreement between the two countries, and ratification by the National Assembly, it is expected that actual implementation will take an additional 2-3 years at minimum.
However, opposition from some industries is inevitable. Currently, Thailand is requesting access to the domestic market for wood products such as PB used in furniture manufacturing, but the related industry is already suffering from the influx of low-priced Thai PB. In April this year, the Trade Commission recognized the damage to domestic industries due to dumping practices of Thai PB and imposed provisional anti-dumping duties of 11.8-17.2%. A government official commented, “For agricultural and fishery products, this could be an opportunity to expand domestic consumers’ choices and access products not produced domestically at lower prices. For other affected industries, we plan to develop complementary measures and implement support plans for the industry in parallel.”
Thailand is currently Korea’s 18th largest trading partner and 5th largest ASEAN trading partner. Bilateral trade decreased during the COVID-19 period of 2019-2020 but reached a record high of $16.5 billion (approximately 23 trillion won) in 2022. As of last year, Thailand’s nominal GDP was $526.4 billion (approximately 733 trillion won), the second highest in ASEAN (excluding Singapore) after Indonesia. Noh Geon-gi, director general for FTA negotiations at the Ministry of Trade, Industry and Energy and chief negotiator for Korea, emphasized, “The Korea-Thailand CEPA will serve as a focal point for further activating trade and investment between the two countries and establishing a broad-based economic cooperation foundation. It will improve the welfare of consumers in both countries and provide tangible benefits to businesses by enhancing export competitiveness and diversifying overseas markets.