Exports to Thailand from Western Australia have surged about 270 per cent from a low point just three years ago, as the South-East Asian country seeks to strengthen linkages with Australia and partners.
Exports to Thailand from Western Australia have surged about 270 per cent from a low point just three years ago, as the South-East Asian country seeks to strengthen linkages with Australia and partners.
In the year to May, WA merchandise shipments to Thailand were $2.8 billion, making it one of the state’s 10 biggest markets.
That was up from as low as $744 million in the 12 months to September 2016.
Nationally, exports to Thailand for the year to May were $6.3 billion.
WA’s main exports to Thailand are gold, chemicals, barley, and petroleum, according to the Department of Jobs Tourism Science and Innovation.
Speaking at a recent breakfast hosted by the Thailand Board of Investment, Chamber of Commerce and Industry of WA manager of international trade and investment, Michael Carter, said there were emerging industries that would provide trade opportunities.
He said those included healthcare, marine, aviation, food and beverages, and oil and gas.
“When you’re looking into the region … with the suite of free trade agreements that are in place, it is a bit of a noodle bowl,” Mr Carter said.
The two main trade agreements for Australia pertaining to Thailand were the bilateral Thailand-Australia FTA, and the multilateral ASEAN-Australia-New Zealand FTA, Mr Carter said.
Thailand reportedly applied earlier this year to join another trade agreement, the Comprehensive and Progressive Agreement for Trans Pacific Partnership.
That is an 11-nation free trade deal that includes Australia, Japan and Canada.
The deal, known as the TPP-11, is a particularly advanced trade agreement because it focuses on investment relationships, not just reducing barriers to the movement of goods.
Provisions include the investor state dispute resolution clause, which can provide a recourse for Australian or foreign investors during disagreements with signatory governments.
That process applies to obligations around expropriating property, capital movements, non-discrimination and minimum standards of treatment.
Tiger cub
Thailand has undergone significant economic development during recent decades, earning the country the moniker of a ‘tiger cub’, one of five Asian nations following in the footsteps of the original tiger economies of Hong Kong, South Korea, Taiwan and Singapore.
The World Bank’s most recent report on the country highlighted this transition.
“Poverty declined substantially over the last 30 years, from 67 per cent in 1986 to 7.8 per cent in 2017 (as measured by the upper-middle income class poverty line of $5.50/day) during periods of high growth and rising agricultural prices,” the World Bank said.
“However, in recent years, progress in poverty and inequality reduction has slowed down, mainly due (to) falling agricultural prices and slower wage growth.
“This led to low and negative growth in household consumption among the poorer segments of the population and caused a small increase in inequality.”
The country’s currency has also appreciated in the past five years.
In August 2014, 1 baht would buy 3.3 Australian cents, but now it trades at closer to 4.6 cents.
Nonetheless, recent numbers suggest a short-term slowdown driven by trade, according to Bank of America Merrill Lynch.
“Thai exports dipped 2.2 per cent year on year in June,” a report from the bank said.
“Excluding one-off military-related items, exports in the first half of 2019 fell 4.1 per cent year on year.
“Imports sank further to -9.4 per cent year on year as all categories of imports contracted, suggesting weakening domestic demand.
“There is a downside risk to our GDP forecast of 3.3 per cent (growth) in 2019 as our 1.5 per cent export growth assumption is difficult to achieve.”
