Bangkok Post - 18 April 2026
Thailand banks on EU trade deal
By Somhatai Mosika
The international trade landscape is changing rapidly, with more barriers and the waning influence of certain established international organisations. In response, countries are reducing their reliance on multilateral systems and strengthening economic stability through bilateral and regional free-trade agreements (FTAs).
How do FTAs shape Thailand's trade and economy, and which sectors could face heightened risks, especially following the EU's finalisation of its FTA with India?
What is the latest progress in negotiations for the EU-Thailand FTA?
Chotima Iemsawasdikul, director-general of the Department of Trade Negotiations (DTN), said eight rounds of talks have taken place, with the latest round hosted by Thailand in Chiang Mai.
The negotiations have progressed steadily, with agreement reached on three additional chapters. These include trade remedies, which allow the use of measures to mitigate the impact of import surges resulting from tariff reductions; exceptions for public health, environmental protection, and national security; and national treatment and market access rules for goods trade between the two sides.
In addition, agreement was reached on a subtopic regarding delivery services regulations under the services and investment chapter, which will help promote competition and regulatory transparency in the sector.
With these recent developments, a total of 11 out of 24 chapters have been finalised. Previous rounds saw agreements on good regulatory practices, transparency, customs procedures and trade facilitation, sustainable food systems, trade and sustainable development, small and medium-sized enterprises (SMEs), technical barriers to trade, and capital movements.
Ms Chotima added that substantial progress has also been made in the remaining chapters, including state-owned enterprises, competition policy, and the automotive annex under the "Technical Barriers to Trade" chapter.
Meanwhile, negotiations on intellectual property, dispute settlement, and institutional provisions, market access covering goods, services and investment, and government procurement, are also progressing.
Ms Chotima said the department will work closely with all relevant ministries and agencies to maximise progress in the next round of negotiations, scheduled for June. Both sides aim to conclude the negotiations this year.
In 2025, the EU was Thailand's fourth-largest trade partner. Bilateral trade reached US$45.03 billion, a 3.44% year-on-year increase. Thailand's exports to the EU were valued at $26.4 billion and imports were valued at $18.5 billion.
Key exports include computers, parts and peripherals; gems and jewellery; air conditioners and rubber products; and transformers and components, while key imports include machinery and components; medical and pharmaceutical products; chemicals, electrical machinery and components; and medical devices.
How significant is the EU-India FTA?
On Jan 27, 2026, the EU and India concluded negotiations on the EU–India FTA after over two decades of discussions. This agreement is the largest FTA finalised by both parties, covering nearly 2 billion people, or about 25% of the world's population, and accounting for around 20% of global GDP, according to Aat Pisanwanich, an independent economist.
Prior to the FTA, Indian exports to the EU faced import tariffs ranging from 4% to 26%, depending on the product category, particularly for labour-intensive goods such as textiles, garments, leather products, footwear, and seafood, which are among India's key exports.
Under the EU-India FTA, the EU grants tariff preferences covering 99.5% of the total value of Indian exports. Most products will receive immediate tariff elimination, while the remainder will benefit from gradual tariff reductions or preferential treatment through tariff-rate quotas.
Experts expect full implementation of this FTA by early 2027 due to ratification, legal and translation processes.
Which sectors in Thailand may face risks following the EU-India FTA?
Mr Aat explained that, with India now gaining zero or near-zero tariff access to the EU market, Thai exports to Europe continue to face most favoured nation (MFN) tariff rates ranging from 0% to about 26%, depending on the product. This gives Indian products a significant price advantage and increases the risk of trade diversion, whereby European importers may switch from Thai goods to Indian alternatives.
Thai export sectors expected to be most affected are labour-intensive products that compete directly on price with India, including garments and textiles, seafood, and processed seafood products.
Meanwhile, skill-intensive products such as gems and jewellery will also face heightened competition. However, Thailand may still maintain competitiveness in mid- to high-end market segments by emphasising quality, design, and value addition.
Mr Aat emphasised that the EU-India FTA will intensify pressure on the competitiveness of Thai exports in the European market, particularly for labour-intensive goods. Therefore, Thailand must upgrade product value and expedite FTA negotiations with the EU to remain competitive.
How can Thailand address the challenges arising from the EU-India FTA?
Mr Aat said that although the EU-India FTA may negatively affect Thai exports to Europe, every crisis presents opportunities. India will continue to require raw materials to supply its industries that export to the European market. Thailand should therefore accelerate market expansion and strengthen cooperation with India across various industries.
He said that Thailand should not consider itself solely a "loser" from this FTA. Instead, the country should adopt a proactive strategy to reposition itself within the evolving global supply chain.
First, Thailand should accelerate efforts to expand its role as a supplier of intermediate goods to export-oriented Indian industries targeting the European market.
This is particularly relevant for chemicals and coatings, where Thailand enjoys a significant trade surplus with India, as well as for intermediate textile products such as cotton fabrics and synthetic fibre fabrics, and automotive parts that have strong growth potential.
Second, Thailand must expedite negotiations for an FTA with the EU to maintain its competitiveness in the European market. Otherwise, Thai labour-intensive exports will inevitably lose market share to India. At present, Thailand faces competitive risks not only from the EU-India FTA but also from the EU-Vietnam FTA.
Third, Thailand should upgrade its product standards to align with the EU's environmental and sustainability frameworks, including the Carbon Border Adjustment Mechanism and requirements on human rights and labour. These measures are increasingly becoming "geopolitical technical barriers" rather than traditional tariff measures, and may also lead to greater demand from India for Thai inputs used in exports to the European market.
