Southeast Asia
DISCUSSION DRAFT 08-05-2006
Thai-U.S. Economic Partnership: Opportunities and Limitations
Richard P. Cronin
Senior Associate, Henry L. Stimson Center
Conference on
Thai – U.S. Relations:
Forging a New Partnership in the 21st Century
10-11 August 2006
Four Seasons Hotel, Bangkok, Thailand
Organized by
Faculty of Political Science, Chulalongkorn University
Thai Studies Program, Georgetown University, Washington, D.C.
Ministry of Foreign Affairs, Thailand
Underlying Logic of the U.S.-Thai Alliance Relationship and Economic Cooperation
Although our topic this afternoon is about economic partnership, it would be useful to review the broader basis for U.S.-Thai bilateral relations.
The U.S.-Thai Alliance
Long before our current level of globalization, security and trade have been intimately connected. Perhaps second only to geography, economic and financial power has always undergirded security.
By entering into an alliance with the United States during the Cold War, and embracing the post-Bretton Woods international order, Thailand has not only prospered, but has strengthened its independence and sovereignty in a historically rough neighborhood.
From the U.S. perspective, Thailand has a lot going for it:
Geography – Thailand is the largest economy on mainland Southeast Asia and the second largest country in terms of land area and population. Its central geographic location on the South China Sea and the Indian Ocean littoral, and excellent economic infrastructure makes it a regional core economy and transportation hub.
Security -- Both because of these geographic factors and shared interests in regional stability and prosperity, the U.S.-Thai security alliance, with roots going back to World War II, has survived the passing of the Cold War and remains highly relevant to a more complex world involving both traditional security concerns as well as both old and new transnational issues such as piracy, terrorism, and drug and human trafficking. Thailand’s economic power extends its economic and political influence well into the interior of the Mekong River Basin and up the border with China.
Prominent Role in Asian Regionalism – Thailand also plays a key role in supporting ASEAN as an organization and contributing to the wider stability and prosperity of Southeast Asia. For instance, Thailand’s support of the ASEAN Free Trade Area (AFTA) and its own policy reforms have made it a leading supporter of economic regionalism. Thanks in large part to specific reductions of tariff and non-tariff trade barriers through AFTA, Japan in particular has shown renewed interest in Thailand as a hub for regionalized production of vehicles, automotive parts, and other consumer manufactures such as white goods. U.S. vehicle manufacturers as well have begun looking closer at Thailand as a regional manufacturing hub. Particularly in terms of the economic challenge from China and the expansion of its influence in Southeast Asia, the impact and importance of economic and political regionalism within ASEAN goes far beyond the addition to national incomes derived from increased economic efficiency and competitiveness.
Financial Center and Regional Headquarters – As I will discuss shortly, Thailand has a long way to go to fulfill its potential as a regional financial and services center, but it also has come a long way. Within ASEAN, Thailand’s only real rival is Singapore, which has focused on developing this sector as a matter of economic survival.
Basic Metrics of U.S.-Thai Relations
Relevant Data on size, content, growth of trade and investment:
• Nearly $28 billion in two-way trade in 2005, compared to $20.7 in 2001, an increase of about one-third
• The U.S. is Thailand’s largest export market after ASEAN and slightly ahead of Japan and the EU.
• The U.S. markets accounts for about 15 percent of Thai exports, slightly ahead of Japan and the EU, and second only to ASEAN regional trade (about 22 percent)
• In 2005 the U.S. imported $19.9 billion and exported $8.6 billion in goods
• U.S. deficits long-standing -- $8.7 billion in 2001 growing to $12.6 billion in 2005
• The U.S. accounts for about 7.5 percent of Thailand’s imports, well behind Japan (23%), ASEAN (18%) and slightly lower than the EU (9%) and China (9%)
• Manufactured goods, especially electronics, machinery and transport equipment account for about three-fourths of Thai exports to the United States, while machinery and transport equipment accounts for more than half of U.S. exports to Thailand
The U.S.-Thai FTA
The currently stalled negotiations on a U.S.-Thai FTA have huge importance to Thailand and significant importance to the United States, all the more so because of the apparent impasse in the Doha Round of the WTO and the impending expiration of the U.S. President’s Trade Promotion Authority (PTA), previously known as “fast track” authority. The United States cannot negotiate a comprehensive trade agreement without PTA for the simple reason that unless Congress agrees to accept an up or down vote on a treaty it would inevitable force the President to seek to renegotiate any provisions that it opposed. This is an evitable consequence of our unique system of shared power and checks and balances. However, countries such as those of the EU and Japan, with parliamentary systems of government in which the Executive has a freer hand in negotiating treaties and making laws, have their own problems resolving policy conflicts affecting major economic interests.
I will talk about the proposed U.S.-Thai FTA mainly from the perspective of its rationale and theoretical costs and benefits. Obviously, the current political situation in Thailand has created great uncertainty about whether an FTA can be concluded before July 1, 2007, when the current TPA authority expires. Nonetheless, the current political impasse in Thailand has not quelled the public debate about the U.S.-Thai FTA, and the sources of concern are worthy of discussion.
Urban Thais and farmers remain wary of FTAs, including other agreements, such as the 2002 agreement between ASEAN and China. That agreement is supposed to lead to a much less comprehensive FTA by 2010 for Thailand and the other more advanced Southeast Asian economies. The so-called “early harvest” aspects of the agreement do not look especially beneficial so far. Although overall Thai exports to China are growing rapidly, the economies remain essentially competitive. Japan has also gotten into the act, concluding an FTA with Thailand that has yet to be signed due to the political situation in Thailand and concerns that the agreement is one sided.
Pro’s and Con’s of FTAs
In general, FTAs are beneficial to both partners for the simple reason that the removal of tariff and non-tariff barriers, and reducing the transaction costs of foreign investors benefits both partners. Of course, FTAs create winners and losers, which make them more a matter of political economy than simple “all other things being equal” economics.
In today’s world of globalized trade, Thailand and ASEAN in general have potentially important benefits to be gained from FTAs with the United States. Of course, with the important exception of sugar, textiles and a few other exports, Thailand already enjoys low or zero tariff access to the U.S. market. But the real benefits are not tariff reductions.
Comprehensive FTAs of the kind promoted by the United States involve elements that make a less-developed trading partner more attractive to multinational investors. These include especially IPR protection, measures to reduce transaction costs such as legal reform and transparency, the legal regime for foreign investment, and the openness of the banking and other financial services sectors.
Some of these measures have a negative impact on domestic producers in certain sectors, but overall they tend to boost national GDP growth. This is not just theory – it has worked in the past for Thailand and other once developing ASEAN countries. A few economies, Japan and South Korea in particular, achieved development in a closed environment, but the circumstances were highly unique and their transition to more openness – a requirement for participating in globalization -- has been painful and incomplete. In any event, Thailand and its ASEAN neighbors don’t have that option in a global economy dominated by multinational organized production and brand names.
As Seiji Naya and Michael Plummer have argued in a very insightful paper on the economics of the new regionalism, “Closer economic cooperation with the United States also holds the most hope for expediting necessary structural change in the region, as well as featuring economic benefits.” They note that while FTAs “may not be optimal in a pure economic sense,” given the natural compromises with powerful groups and sectors that are necessary to forge a politically viable agreement, they serve two related purposes:
First, they eliminate the costs of staying outside the U.S. network of FTAs, which are by nature preferential, and in effect regain the MFN status that has been lost to existing American FTA partners.
Second, because of importance of both the U.S. economic and security role, in the process of strengthening bilateral economic ties, FTAs also reinforce long-term U.S. security engagement in the region.
More specifically, FTA’s enhance the conditions for attracting FDI and related technology transfer, which both increases efficiency and competitiveness. U.S. and other multinational investment is especially critical to moving up the value-added ladder and regaining competitiveness against China, which has already commands FDI for labor-intensive manufacturing and is gaining fast in the more lucrative areas such as electronic components and product design, as well as marketing and services.
Issues in the U.S.-Thai FTA Negotiations
Achieving an FTA will require resolving many knotty and politically sensitive issues on both sides. Inevitably, the United States has the advantage because the U.S. economy is far more important to Thailand the reverse. This reality notwithstanding, an FTA with Thailand, and Malaysia for that matter, is important to the United States for several reasons that are both economic and non-economic.
First, Thailand is a big and developed enough economy that the potential for increasing trade, investment and profits is significant. The United Nations Conference on Trade and Development UNCTAD for 2005 ranked Thailand the third most attractive investment location in Asia, after China and India, while the Swiss Institute for Management Development (IMD)’s 2005 World Competitiveness Yearbook ranked Thailand ninth in the world. Clearly, Thailand has a firm base to build on as regards attracting FDI.
Agriculture is one of the thorniest issues for both trading partners because organizations of farmers and agro-business tend to have far more political power than their numbers or share of national GDP would suggest. Thailand is the 17th largest market U.S. agricultural exports despite Thailand’s average tariff of 23.6 percent. Not surprisingly, Thai farmers are resisting agricultural liberalization. The United States likewise is seeking to maintain protection for its own highly subsidizes sugar market.
The U.S. is highly competitive in high technology, creative content such as films and music, and services, pharmaceuticals, financial services and marketing. The U.S. expects big gains in these areas. Thailand has raised some legitimate issues, for instance the possibility that critical medicines such as generic versions of drugs to treat HIV/AIDS and other life-threatening diseases will become more expensive. This is a complex issue, and there are seemingly credible arguments on both sides.
Frankly, many Americans feel that the pharmaceutical industry has far too much political power. For the purposes of analyzing the larger costs and benefits of the FTA for Thailand, it should also be noted that the Thai pharmaceutical industry is highly sophisticated, and better IPR protection would seem to be a requirement for moving ahead. The same could be said for another sensitive area – genetically modified foods and seeds. Despite considerable domestic opposition to GMS foods, Thailand itself has significant expertise in this area and the current government has been interested in increasing the country’s research and development capabilities. Rightly or wrongly, Prime Minister Thaksin has in the past argued that the era of export-led growth had ended, and that Thailand should concentrate on increasing growth in the domestic economy, especially in agriculture.
The Road Ahead
At the moment, the road ahead looks very difficult for the U.S.-Thai FTA negotiations. One would expect the impasse to last into the fall, at least, when hopefully Thailand finds an answer to the current constitutional crisis.
Even if the political situation were normal, many question how many more such comprehensive FTAs the United States can negotiate. After Thailand and Malaysia, none of the ASEAN economies are sufficiently developed and liberalized to make them candidates. The United States has signed Trade and Investment Facilitation Agreements with five ASEAN countries, in addition to the FTA that has already been concluded with Singapore.
Currently, TIFAs only seek to establish whether there is sufficient agreement on goals to move forward on an FTA. Given the limited prospects for additional FTAs in ASEAN besides the negotiations underway with Thailand and Malaysia, and in view of the fact that the conditions are not present for moving ahead with other regional countries, it would appear that the FTA process as we know it is losing its relevance. This is all the more so because of the current environment in Congress regarding several pending agreements and the seemingly slim possibility of renewing TPA next summer.
In a February 2006 Op-Ed article in the Wall Street Journal Asia and WSJ Online I sketched out a possible broader role for TIFAs. Specifically, an "Enhanced TIFA" could serve as an interim deal that incrementally facilitates more trade and investment, but doesn't try to resolve all the issues in one fell swoop. Already, countries can offer unilateral steps towards trade and investment liberalization in TIFA dialogues. Sometimes these are made to obtain relief from existing or threatened U.S. trade sanctions, but in these cases, there may not be enough political backing to progress to an FTA.
Enhanced TIFAs would represent a middle ground between the current arrangement and the cumbersome FTA. By focusing just on the highest priority issues, U.S.-ASEAN trade negotiators could bypass knotty market access disputes and other politically sensitive requirements that currently are required by Congress as a condition for signing an FTA.
Enhanced TIFA agreements could also strengthen the hands of ASEAN trade partners as they negotiate on a full China-ASEAN FTA. (Under the current China-ASEAN agreement, countries can start full bilateral FTA discussions at their discretion. As a first step, China and the ASEAN countries agreed in December 2003 on a package of "early harvest" tariff reductions on a range of agricultural and manufactured goods for a period of three years.) In addition, negotiating Enhanced TIFA agreements as market-opening mechanisms with ASEAN countries could have a global application after the scheduled expiration of TPA.
The general idea of an enhanced TIFA would be to conclude limited agreements on the highest priority issues – especially the ones likely to help Thailand and other ASEAN countries increase their attractiveness to foreign investors. Practically speaking, most of these concessions would have to take the form of voluntary liberalization measures would reduce entry barriers to investment and enhance efficiency and competitiveness. They probably would not of themselves achieve the preferential treatment accorded in a full scale FTA.
The United States has now called for a U.S.-ASEAN TIFA. Exactly what an ASEAN-wide agreement would entail or produce remains to be clarified. Some statements by senior officials in the USTR and State Department seem to imply that the proposed TIFAs would have some more substance than just discussions to assess the readiness of a country for an FTA. At the same time, USTR Susan Schwab and Deputy USTR continue to express firm commitment to comprehensive, high quality agreements of the traditional kind. The path between a U.S.-ASEAN TIFA and a U.S.-ASEAN FTA would appear to be a long and winding road with many stops and obstacles. That seems all the more reason for the United States and Thailand to forge ahead on achieving an FTA if at all possible.
This doesn’t prescribe any specific bargain on the issues at hand, and certainly doesn’t suggest short-cutting Thailand’s current political situation, which is wholly an internal matter. I do believe, however, that if the political situation can be resolved, and done so at an early enough date, that it may be time to strike while the iron is hot, so to speak. It has been some years since the United States has shown as much positive interest in ASEAN. Whether the reasons have to do with China’s rising regional influence, the stalled Doha Round, or concerns about being shut out of new preferential trading arrangements, the Administration appears ready to make up for lost time. This just might play to Thailand’s advantage in striking the best possible bargain.
Appendix 1: Countries Trade With Major Trading Partners
China's Exports to ASEAN Countries
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 9 8 13 17 21 34 48 54
Cambodia 114 104 164 206 252 295 452 456
Indonesia 1172 1779 3062 2847 3427 4482 6259 8108
Lao 18 22 34 54 54 98 101 96
Malaysia 1594 1674 2565 3223 4975 6141 8087 9204
Myanmar 533 407 496 498 725 908 939 876
Phillippines 1499 1379 1464 1622 2042 3094 4269 4532
Singapore 3901 4502 5761 5795 6969 8869 12687 14844
Thailand 1170 1436 2243 2504 2959 3828 5802 8150
Vietnam 1024 964 1537 1805 2150 3179 4261 5178
China's Total Exports 11034 12275 17339 18571 23574 30928 42905 51498
China's Imports from ASEAN Countries
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 61 148 242 312 251 154
Cambodia 48 56 52 35 25 26 30 30
Indonesia 2462 3051 4125 3888 4501 5748 7224 8288
Lao 8 10 5 7 10 11 13 18
Malaysia 2675 3606 5037 6206 9295 13987 18174 18742
Myanmar 62 101 123 134 137 170 207 348
Phillippines 517 908 1502 1945 3217 6306 9059 10474
Singapore 4226 4061 5261 5143 7054 10484 13997 15918
Thailand 2423 2780 4019 4713 5599 8827 11542 11866
Vietnam 217 354 929 1010 1115 1456 2482 2708
China's Total Imports 12638 14927 21114 23229 31195 47327 62979 68546
EU's Exports to ASEAN Countries
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 690 300 250 150 160 510 230 180
Cambodia 100 80 110 90 110 100 140 140
Indonesia 4330 3550 4060 4060 4330 4690 6180 6620
Lao 30 30 40 30 30 40 80 60
Malaysia 5980 6860 7680 8350 7760 9310 10840 11440
Myanmar 120 120 110 70 80 60 100 80
Phillippines 3500 3470 4040 4080 3090 3710 4380 4440
Singapore 12030 12600 13530 13070 13420 15390 20040 20860
Thailand 5760 5020 5910 6640 6460 7100 8760 10040
Vietnam 1170 1120 1150 1580 1740 2240 2770 2420
EU's Total Exports 33710 33150 36880 38120 37180 43150 53520 56280
EU's Imports from ASEAN Countries
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 310 130 160 60 70 100 130 60
Cambodia 180 260 310 410 460 540 740 580
Indonesia 10200 9400 10100 9850 9870 11190 13020 14220
Lao 100 110 110 120 120 130 170 160
Malaysia 13130 14030 15920 17380 14020 16600 21130 21300
Myanmar 180 230 360 440 390 410 550 400
Phillippines 5320 6810 7970 6910 6850 6810 8350 7720
Singapore 15360 14800 15730 13690 13430 16460 22800 24300
Thailand 10980 10920 12170 11440 10910 12810 16750 16200
Vietnam 3110 3370 3740 4000 4180 5070 6700 7100
EU's Total Imports 58870 60060 66570 64300 60300 70120 90340 92040
Japan's Exports to ASEAN Countries
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 62 52 56 56 319 97 108 104
Cambodia 45 50 52 50 70 54 80 82
Indonesia 4299 4908 7604 6405 6237 7179 9075 10176
Lao 19 23 21 12 18 14 14 14
Malaysia 9330 11153 13886 11012 11016 11250 12565 12880
Myanmar 187 185 196 187 115 125 105 100
Phillippines 7267 8783 10257 8188 8457 9011 9598 9472
Singapore 14780 16345 20830 14713 14183 14858 17976 17980
Thailand 9352 11358 13634 11873 13217 16043 20274 22766
Vietnam 1333 1641 1975 1777 2135 2623 3181 3476
Japan's Total Exports 46674 54498 68511 54273 55767 61254 72976 77050
Japan's Imports from ASEAN Countries
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 1028 1053 1653 1696 1515 1826 1892 2074
Cambodia 16 35 52 66 75 89 100 94
Indonesia 10824 12618 16371 14883 14174 16353 18652 20688
Lao 20 14 12 7 7 7 8 8
Malaysia 8684 10943 14490 12824 11173 12593 14093 14832
Myanmar 89 101 119 102 110 140 180 184
Philippines 4415 5308 7190 6418 6498 7033 8243 8224
Singapore 4717 5438 6426 5382 5001 5493 6283 7702
Thailand 8265 8876 10595 10353 10507 11890 14098 15664
Vietnam 1748 1972 2637 2640 2529 3088 3858 3998
Japan's Total Imports 39806 46358 59545 54371 51589 58512 67407 73468
US's Exports to ASEAN Countries
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 123 69 145 104 47 36 49 40
Cambodia 11 19 30 30 29 58 59 64
Indonesia 2291 1925 2479 2500 2581 2521 2679 3332
Lao 4 1 4 4 4 5 6 12
Malaysia 8954 8839 10830 9380 10348 10920 10897 9648
Myanmar 32 12 17 12 11 7 12 6
Philippines 6736 7183 8677 7665 7270 7992 7072 6408
Singapore 15673 16348 17497 17692 16221 16573 19601 20552
Thailand 5223 4969 6538 5995 4860 5842 6363 7348
Vietnam 274 295 647 461 580 1324 1163 1192
US's Total Exports 39321 39660 46864 43843 41951 45278 47901 48602
US's Imports from ASEAN Countries
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 224 422 408 424 306 446 429 568
Cambodia 388 620 861 1017 1146 1336 1592 1594
Indonesia 9973 10170 11097 10907 10385 10271 11680 12330
Lao 22 14 10 4 3 4 4 4
Malaysia 19519 21754 25990 23072 24734 26190 29051 31406
Myanmar 175 244 487 502 380 296
Philippines 12335 12697 14216 11775 11431 10496 9581 9064
Singapore 18654 18599 19630 15262 15093 15490 15595 14778
Thailand 13971 15025 17161 15566 15683 16106 18646 19746
Vietnam 596 653 860 1139 2585 4910 5727 6406
US's Total Imports 75857 80198 90720 79668 81746 85545 92305 95896
ASEAN countries Exports to China
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 0.01 11 57.83 134.76 219.83 294.78 203.12 140.08
Cambodia 42.21 8.9 23.78 16.7 22.32 23.64 27.19 28.74
Indonesia 1832 2009 2768 2201 2903 3803 4605 7098
Lao 7.18 8.69 4.85 6.78 8.77 10.18 11.36
Malaysia 1994 2318 3028 3821 5253 6810 8460 15176
Myanmar 56.02 92.25 111.74 121.99 124.47 154.12 187.68 315.24
Philippines 344 575 663 793 1356 2145 2653 5556
Singapore 4065 3920 5377 5329 6863 10134 15392 17356
Thailand 1769 1861 2806 2863 3553 5710 7099 7932
Vietnam 440 746 1536 1417 1518 1323 2322 2462
Exports to China 10549.42 11549.84 16376.2 16704.23 21821.39 30407.72 40960.35 56064.06
ASEAN countries Imports from China
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 9.98 19.25 16.78 18.94 23.16 64.58 50.16 59.56
Cambodia 95.69 85.9 112.88 86.93 276.76 324.11 480.74 501.1
Indonesia 906 1242 2022 1843 2427 2957 4101 8356
Lao 19.62 24.38 37.86 59.85 59.69 108.06 108.8
Malaysia 1849 2139 3237 3804 6157 7300 10339 10300
Myanmar 586.2 447.21 546.09 547.26 797.34 998.48 1029.24 963.7
Philippines 1199 1040 786 975 1252 1797 2659 3506
Singapore 4851 5697 7116 7195 8869 11073 16211 18222
Thailand 1822 2495 3377 3711 4928 6067 8183 11084
Vietnam 515 673 1401 1606 2159 3496 4557 5698
Imports from China 11853.49 13862.74 18652.61 19846.98 26948.95 34185.23 47718.94 58690.36
ASEAN Countries Exports to EU
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 284.8 53.35 114.48 50.23 63.83 14.76 116.99 49.84
Cambodia 131.24 146.46 231.07 321.7 416.86 494.88 669.64 514.96
Indonesia 7774 7096 8681 7773 7924 7970 9037 11534
Lao 91.93 99.49 99.22 108.17 111.71 119.13 154.28
Malaysia 11885 13301 13435 11983 11565 12711 15904 17632
Myanmar 159.17 209.25 325.95 400.28 356.58 376.61 500.07 355.56
Philippines 5995 6778 6831 6199 6371 5889 6818 6482
Singapore 17404 17417 18244 16278 15675 19327 25984 25240
Thailand 9674 9845 10877 10505 10207 11802 14311 14692
Vietnam 2079 2515 2848 3004 3164 4613 6082 6442
Export to EU 55478.14 57460.55 61686.72 56622.38 55854.98 63317.38 79576.98 82942.36
ASEAN Countries Imports from EU
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 904.71 149.45 225.06 166.34 176.58 142.88 254.57 182.78
Cambodia 152.46 91.78 93.95 26.66 122.86 114.08 149.68 160.7
Indonesia 5866 3801 4166 4049 3872 3555 5324 6246
Lao 31.3 36.42 44.47 31.19 38.41 47.07 84.83
Malaysia 6904 7624 8807 9495 9048 9794 12641 13258
Myanmar 136.97 134.21 114.55 80.95 92.89 66.03 108.06 78.92
Phillippines 2667 2787 3135 3027 2764 3018 3663 4102
Singapore 14097 14133 15248 13686 13791 15959 22030 21512
Thailand 5336 5909 6300 7598 7109 7583 9399 10726
Vietnam 1241 1095 1317 1506 1841 2465 3045 2674
Import from EU 37336.44 35760.86 39451.03 39666.14 38855.74 42744.06 56699.14 58940.4
ASEAN Countries Exports to Japan
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 934.41 1072.21 1285.87 1541.51 1377.17 1811.45 1720.18 1885.64
Cambodia 7.93 9.25 10.73 13.3 68.12 81.02 90.49 85.14
Indonesia 9116 10397 14415 13010 12045 13603 15962 18588
Lao 17.79 12.28 10.93 6.3 6.11 6.71 7.29
Malaysia 7716 9839 12780 11770 10530 11222 12777 13628
Myanmar 81.35 92.19 108.44 92.78 100.3 126.89 163.47 168.04
Phillippines 4232 4660 5609 5057 5293 5768 7983 7752
Singapore 7226 8513 10404 9341 8935 9696 11567 11886
Thailand 7475 8259 10164 9964 10000 11435 13458 14702
Vietnam 1514 1786 2575 2510 2437 2808 3507 3634
Export to Japan 38320.48 44639.93 57362.97 53305.89 50791.7 56558.07 67235.43 72328.82
ASEAN Countries Imports from Japan
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 67.78 106.08 67.41 61.06 351.21 132.71 118.65 113.42
Cambodia 71.09 73.92 58.39 16.65 76.83 59.78 88.39 91.16
Indonesia 4292 2913 5397 4689 4409 4228 6082 10302
Lao 21 24.89 23.64 12.97 19.63 15.02 15.4
Malaysia 11470 13633 17331 14211 14168 14282 16773 14664
Myanmar 205.45 203.47 215.57 205.29 126.87 136.96 115.83 110.3
Phillippines 6030 6136 6511 6633 7233 7640 7674 8042
Singapore 17010 18505 23189 16091 14576 15396 19096 18784
Thailand 10175 12256 15315 13881 14902 18266 22379 26124
Vietnam 1482 1618 2301 2183 2505 2885 3500 3824
Import from Japan 50824.32 55469.36 70409.01 57983.97 58367.54 63041.47 75842.27 82054.88
ASEAN Countries Exports to US
1998 1999 2000 2001 2002 2003 2004 2005(Est.)
Brunei Darussalam 203.64 390.9 378.13 385.45 278.36 342.73 389.91 515.1
Cambodia 292.94 235.8 739.67 832.2 1041.73 1214.27 1446.91 1448.54
Indonesia 7046 6908 8489 7761 7570 7386 8787 11210
Lao 20 12.64 8.82 3.64 2.64 4 3.36
Malaysia 15885 18533 20162 17816 18826 20540 23749 28552
Myanmar 158.91 222.18 442.73 456.18 345.36 268.64
Phillippines 10145 10493 11406 8994 8691 7275 7209 7538
Singapore 21856 22055 23891 18755 19106 20570 23282 22846
Thailand 12175 12667 14706 13246 13522 13691 15498 15610
Vietnam 469 504 733 1066 2453 4463 5206 5822
Export to US 68251.49 72021.52 80956.35 69315.47 71836.09 75754.64 85571.18 93541.64
ASEAN Countries Imports from US
Brunei Darussalam 135.3 173.6 153.85 114.29 51.12 152.7 54.23 43.48
Cambodia 38.96 38 32.77 16.56 32.12 63.58 64.57 70.18
Indonesia 3523 2841 3393 3210 2644 2702 3236 3666
Lao 3.85 1.21 4.73 3.96 4.62 4.95 6.6
Malaysia 11444 11414 13688 11839 13099 12851 15263 10612
Myanmar 35.2 13.31 18.81 12.65 11.55 7.48 12.65 5.5
Phillippines 6561 6366 6413 6412 7289 7407 8276 6534
Singapore 18783 19022 20270 19159 16605 18003 20744 21464
Thailand 6053 6443 7291 7198 6197 7190 7270 8644
Vietnam 326 323 346 411 459 1457 1280 1310
Import from US 46903.31 46635.12 51611.16 48376.46 46392.41 49838.71 56207.05 52349.16
Source: Direction of Trade Statistics Yearbook 2005, Quarterly 2005 Dec, IMF
(Million of US Dollars)
Prepared by Thomas Chang, Henry L. Stimson Center (Feb 16, 2006)
Appendix II
(Source: Economic Section, U.S. Embassy, Bangkok)
1Q 2006 THAI GDP BY MAJOR SECTORS (seasonally adjusted)
(2005 GDP = U.S.$176.4 Billion)
1Q 2006 THAI EXPORTS BY SECTORS
(Percentage Share of Total Exports)
2003 2004 2005 1Q06
THAI FOREIGN TRADE (BOP Basis)
In Millions of U.S.$
Merchandise Exports (f.o.b.) 78,105 94,942 109,211 29,091
Growth Rate 18.2 21.6 15.0 17.9
Agriculture 6,693 8,070 7,875 2,348
Fisheries 1,775 1,803 1,976 466
Mining 921 1,244 2,000 542
Manufacturing 68,771 83,762 97,331 25,713
- Labor Intensive Products 8,710 9,435 10,377 2,675
- High-tech Products 47,515 60,172 70,624 18,924
- Resource Based Products 9,008 10,074 11,366 2,867
Re-exports 132 161 192 43
Merchandise Imports (c.i.f.) 74,346 93,482 117,788 29,316
Growth Rate 17.4 25.7 26.0 5.4
Consumer Goods 6,326 7,455 8,378 2,254
Non-durable 3,782 4,381 4,860 1,271
Durable 2,544 3,073 3,518 983
Intermediate & Raw Materials 32,972 41,823 49,413 12,083
Capital Goods 21,932 25,718 32,027 8,414
Other Imports 13,808 19,041 28,408 7,216
Vehicles and Parts 3,052 3,612 3,939 916
Fuel and Lubricant 8,937 13,150 20,828 5,514
EXTERNAL DEBT
In Millions of U.S.$
Private 34,824 36,382 37,892 42,388
Public & Monetary Authorities 16,959 14,930 13,542 13,884
Total 51,783 51,312 51,434 56,272
Short-term (1 year or less) 10,904 12,174 15,762 18,485
Debt Service Ratio (%) 16.0 8.5 10.9 5.9
Public sector (%) 7.6 1.9 1.1 1.2
Debt/GDP (%) 40.3 35.7 32.0 n.a.
Reserves/Short-term Debt (%) 386.5 409.3 330.3 299.0
TOURISM
All Arrivals 10,082,109 11,737,413 9,249,469 (10m)* n.a.
U.S. Arrivals (Nationality) 514,863 627,506 508,140 (10m)* n.a.
MAJOR THAI TRADING PARTNERS
1Q06 Thai Export Destinations
1Q06 Thai Import Sources
FOREIGN TRADE WITH U.S.A.
(By 1-digit SITC commodity, From U.S. Department of Commerce)
In Millions of U.S.$
2004 2005 1Q06
Exports to U.S.A. (f.o.b.) 17,577 19,892 5,179
0 Food and Live Animals 2,009 2,199 548
1 Beverages and tobacco 44 47 16
2 Crude Materials, Inedible, Except Fuels 437 425 129
3 Mineral fuels, lubricants 32 56 87
4 Animal and vegetable oils and fats 3 4 1
5 Chemicals 281 435 136
6 Manufactured Goods 1,857 1,971 530
7 Machinery and Transport Equipment 7,573 9,309 2,344
8 Miscellaneous Manufactured Articles 5,025 5,124 1,289
Imports from U.S.A. (f.a.s.) 6,363 7,233 1,713
0 Food and Live Animals 345 325 80
1 Beverages and tobacco 23 17 1
2 Crude Materials, Inedible, Except Fuels 638 600 138
3 Mineral fuels, lubricants 77 121 31
4 Animal and vegetable oils and fats 3 2 1
5 Chemicals 770 793 237
6 Manufactured Goods 402 456 115
7 Machinery and Transport Equipment 3,443 4,039 914
8 Miscellaneous Manufactured Articles 500 629 155
BALANCE OF PAYMENTS
In Millions of U.S.$
2003 2004 2005 1Q06
Total Exports (f.o.b.) 78,105 94,941 109,211 29,091
Total Imports (c.i.f.) -74,346 -93,481 -117,788 -29,316
Trade Balance 3,759 1,460 -8,578 -225
Net Services & Unreq. Transfers 4,206 5,405 4,864 1,881
Current Account Balance 7,965 6,865 -3,714 1,656
Net Capital Movements -8,000 -591 7,498 932
Private and State-enterprises -10,062 -2,152 8,430 866
Public -607 -1,504 -932 66
Monetary Authorities 2,669 3,065 0 0
Errors & Omission 178 -539 1,638 411
Overall Balance 143 5,735 5,422 2,999
International Reserves 42,148 49,832 52,066 55,266
GOVERNMENT FINANCE
In Millions of U.S.$
FY02/03 FY03/04 FY04/05 FY05/06
Revenue (+) 24,636 29,546 34,106 n.a.
Expenditures (-) 24,538 30,243 33,297 n.a.
Budgetary Balance 98 -697 809 n.a.
MONETARY STATISTICS (Year-End)
In Billions of U.S.$
2003 2004 2005 1Q06
Bank Deposits 129.0 136.5 147.9 159.4
Bank Credits 119.3 131.2 141.8 146.4
Non-Performing Loans (NPLs)
Percentage of Total Loan 12.71 10.86 8.16 7.97
KEY INDUSTRIAL PRODUCTION
(Metric tons unless otherwise indicated)
2003 2004 2005 1Q06
Food:
Sugar (1,000 Metric tons) 7,766 7,100 4,830 4,316
Raw Milk 644,970 682,290 718,553 175,405
Canned Pineapple 449,579 451,340 486,343 150,395
Canned Seafood 555,895 540,404 626,670 161,496
Frozen Seafood 594,580 584,552 606,804 152,543
Beverages:
Liquor (20,000 Liters) 28,199 32,246 30,011 8,561
Beer (Million Liters) 1,602 1,632 1,695 484
Tobacco 31,908 34,761 32,978 6,472
Textiles & Textiles Products:
Spinning 783,164 845,893 775,202 192,672
Synthetic Fiber 830,701 893,859 809,033 201,602
Petroleum Products 44,586 48,323 48,133 12,150
(Million Liters)
Cement (1,000 Metric Tons) 32,530 35,626 37,872 10,173
2003 2004 2005 1Q06
Iron & Steel Products:
Galvanized Iron Sheet 462,104 436,090 283,639 72,423
Steel Pipe 434,775 435,702 406,019 115,000
Wire Rod 455,241 518,904 525,972 117,157
Passenger Car (Units) 251,691 299,039 277,603 74,628
Commercial Car (Units) 490,362 628,560 847,712 229,790
Motorcycle (1,000 Units) 13,187 14,547 14,333 641
Integrated Circuit 8,223 9,848 11,378 3,274
(Million Pieces)
Hard Disk Drive (1,000 Units) 54,173 75,685 120,614 34,076
TV (1,000 Units) 6,538 6,942 6,916 1,404
Pulp & Paper Products 980,995 919,969 925,473 255,198
Block Rubber 708,744 678,555 865,720 205,407
KEY AGRICULTURAL PRODUCTION
Thousand of Metric Tons
2003 2004 2005 1Q06
Grains and Food:
Cassava 23,849 19,236 16,271 11,050
Rice 29,337 29,299 29,207 4,038
Sugarcane 81,755 69,808 43,666 40,776
Maize 4,081 4,300 3,881 208
Oils:
Palm 4,903 5,182 5,003 1,202
Coconut 1,957 1,848 1,674 190
Soy Bean 237 235 219 66
Raw Materials and Fibers:
Rubber 2,861 3,005 2,967 754
Note:1Q06 = The first quarter (Jan-Mar), 2006; n.a. = not available
* 10m = January –October
Source: All data are obtained from Bank of Thailand (BOT), National Economic and Social Development Board (NESDB), National Statistical Office (NSO), and U.S. Embassy (Economic Section) unless otherwise indicated.
Appendix III
Components of ASEAN 5’s Trade with China