How the Doha Round Could Impact Thailand

The Doha Round was an attempted multilateral trade agreement between the members of the World Trade Organization (WTO). Negotiations started in 2001 in the city of Doha, intending to reduce trade barriers around the world and thus facilitating international trade. 

However, negotiation progress stalled in 2008, and since then, no significant talks have taken place. To date, the future of the Doha Round remains unclear. 

The major conflict has led to a breakdown of the negotiations. This was due to significant differences between developed economies led by Japan, the EU, the US, and Canada and the major developing nations represented by India, Brazil, China, and South Africa. The developed economies refused to reduce agricultural subsidies, which are a concern for developing countries as they result in competitive disadvantages for their agricultural export goods. 

If the Doha Round continued its negotiations and finally came to an agreement, Thailand would be a beneficiary, because the country relies heavily on exports. Key exports include computers and parts, automobiles, gems and jewelry, electrical circuits, rubber product, air-conditioners, and processed chicken.

The Doha Round’s most relevant negotiation points for Thailand’s economy were: 

1. Reduction of tariffs: After China, the US and the EU are Thailand’s major trading partners. A decrease in tariffs and simplified trade regulations would result in a significant boost for Thailand’s export and import economies.

2. Clarification of rules and regulations on foreign-provided services: Thailand is home to a massive tourism industry that provides services to international travelers. More relaxed rules for foreign service providers would have been beneficial for the entire global tourism industry.

3.Trade facilitation: A goal of the Doha Round was to clarify and improve custom fees, documentation, and regulations to cut bureaucracy and corruption in customs procedures. Thailand’s main exports are machinery, equipment, and vehicles. These are all subject to strict import regulations and cumbersome bureaucracy, and a more streamlined regulatory framework would positively impact Thailand’s export manufacturing industry. 

4. eCommerce: The Doha round wanted to achieve that countries won’t impose customs duties or taxes on internet-based products or services. Today, digital services taxes and other eCommerce regulations affect Thailand’s growing eCommerce sector. A policy change would support Thai eCommerce businesses in their international expansion. 

The Doha Round included 21 main points, but the above four were the most relevant for Thailand. As the negotiations have failed and the future is unclear, Thailand has shifted its focus to other trade agreements. The government has announced to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and is pursuing the resumption of Thai-EU free trade agreement (FTA) talks at ministerial levels. Nevertheless, a continuation of the Doha Round would be in Thailand’s best interest. 

For SMEs engaging in global trade, it’s never a good idea to wait for politicians to create the right conditions. Whether or not the Doha Round continues, we don’t know. For those who can’t wait, there is Export Portal, a B2B marketplace for international import and export businesses. Take a look at our service and become part of our growing community.