Thailand, EU agree to resume talks on free trade pact – The Diplomat

Thailand and the European Union have agreed to resume negotiations on a bilateral free trade agreement, which were frozen after the military came to power in a 2014 coup.

In a statement yesterdayThe European Commission said senior officials from both countries will begin talks in Thailand later this year to reach an “ambitious, modern and balanced free trade agreement” by 2025. The talks will cover trade in goods and services, as well as investment in Thailand’s key industries in which the EU is seeking to increase its share, such as renewable energy, electric vehicles and chip manufacturing.

“This announcement confirms the key importance of the Indo-Pacific region to the EU’s trade agenda, paving the way for deeper trade links with the second largest economy in Southeast Asia and further strengthening the EU’s strategic engagement with this growing region,” the statement said. . The commission said.

Meeting reportedly followed virtual meeting between EU Trade Head Valdis Dombrovskis and Thai Trade Minister Yurin Laksanavisit. The latter called the resumption of talks a “historic day” for both sides, according to Nikkei Asia. informed, and said they intended to conclude an agreement “within two years.” political quotes a European diplomat stating that negotiations were unlikely to begin before September.

The EU suspended most cooperation with Thailand, including negotiations on a trade deal, in June 2014, a month after the military toppled the elected government of Prime Minister Yingluck Shinawatra. At that time the block expressed his “extreme concern” about events in Thailand and said the military must restore “as a matter of urgency a legitimate democratic process and constitution through credible and inclusive elections.”

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In October 2019, he decided to re-engage with the quasi-civilian government, still led by coup leader Prayut Chan-o-cha, that was formed after the March elections. This culminated in the signing of the long-awaited Partnership and Cooperation Agreement last December.

If signed, the Thailand-EU pact will become the third European bloc bilateral free trade agreement in Southeast Asia after the agreements signed with Singapore in 2013 And Vietnam in 2020. Both reflect Brussels’ desire to strengthen its engagement with the “Indo-Pacific” in general and Southeast Asia in particular, in part to diversify its economic commitments outside of China.

According to the Commission, the EU is currently fourth largest trading partner, and Thailand is the EU’s fourth most important trading partner in Southeast Asia. Bilateral trade in goods was $44.5 billion in 2022, and trade in services was another $8.4 billion in 2020. The Commission said that in terms of investment, the EU is the second largest destination for capital outflows from Thailand, accounting for 14 percent of foreign direct investment (FDI) from Thailand. On the other hand, the EU accounts for a tenth of FDI in Thailand. The agreement is likely to raise the status of the economic partnership between the two countries to the leading one in the region.

At the same time, the EU’s position reflects a contradiction between its goal of using its economic weight to achieve progressive change and its strategic interest in strengthening relations with a strategically important but politically illiberal region. In 2020, in the context of the EU-Singapore Free Trade Agreement, two scientists determined “tensions in the EU’s external relations between hard-line commercial interests on the one hand and its fundamental norms expressed in what we call politics or value-based interests, including human rights, on the other.”

The recent rapprochement between the EU and Thailand confirms this well. While the 2019 elections ended the period of military dictatorship by providing an opportunity for Brussels to renew cooperation, in many ways they simply restored military rule behind a civilian façade. Given the current strength of the military and the frequency of military intervention in Thai politics since 1932, it is also likely that their influence will continue for the foreseeable future to the detriment of Thai democracy. So any EU deal with Thailand will have to find a way to accommodate this reality, either by eschewing human rights conventions or softening them to the point where they can be easily circumvented. And that’s not to mention the human rights compromises associated with negotiating a free trade agreement with one-party Vietnam.

As China becomes an increasingly pressing issue for European leaders, it becomes clear that the balance between values ​​and interests is increasingly tilting towards the latter.