TERMS OF Expansion
If the Thai government also think about diversifying exports in addition to its efforts to boost US goods? Given the size and breadth of the US business, it is still unclear how many Thailand can or should cut out of it.
Growth requires a wider reorganization of global supply chains to lessen dominance and improve resilience. It also involves finding new customers outside the US. This is especially important for Thai manufacturers who manufacture initial equipment ( OEM), such as those that make photosensitive equipment and image sensors.
These businesses frequently work for large multinational corporations on contracts, providing highly specialized elements within strongly integrated global value chains. These manufacturers frequently tether producers firmly to a few powerful lead companies. Thai manufacturers are unable to make changes to their industry due to this.
One approach has been to expand free trade agreements (FTAs ). Thailand already has 15 FTAs in place with colleagues. By facilitating market entry and promoting regional integration, international systems like ASEAN and the Regional Comprehensive Economic Partnership increase trade possible. Additionally, new partnerships with coalitions like the Pacific Alliance and the Southern Common Market ( also known as MERCOSUR)   offer claim.
But, signing more FTAs presents its own set of difficulties. Compliance with laws of nature needs for businesses can be expensive and challenging, which could limit the potential benefits of expanded trade agreements.
While expanding FTAs opens up new markets and boosting economic development, addressing the complexity of conformity and making sure that businesses can rely on these agreements to achieve their goals will be key to their success.
The Thai government may go beyond a quick-term strategy and mobilize resources to address non-tariff restrictions, reorganize supply stores, and boost private business competitiveness. This includes a focus on regulatory transformation, funding in R&D, and targeted fiscal policies.
Thailand runs the risk of losing its competitive advantage in global value chains and experiencing long-term disruption without a coherent plan.
Wannaphong Durongkaveroj is an Associate Professor at Ramkhamhaeng University, Thailand’s Ramkhamhaeng University, and a Visiting Fellow at the Yusof Ishak Institute. This remark first appeared on the Fulcrum site of the Yusof Ishak Institute’s ISEAS – Yusof Ishak Institute.