Thailand is scheduled to announce on Monday the start of negotiations with the European Free Trade Association (Efta) to improve trade, services and investments.
According to Auramon Supthaweethum, director-general of the Trade Negotiations Department, Commerce Minister Jurin Laksanawisit plans to start the free trade agreement (FTA) negotiations with Efta in Iceland on June 20.
Efta comprises Iceland, Liechtenstein, Norway and Switzerland.
"Efta is one of Thailand's targets for an FTA as the group has adopted a free trade policy and has a high level of purchasing power and economic strength. They are leaders in innovations and technologies in addition to having significant investors," Ms Auramon said.
She said Efta has specialised manufacturing for heavy-duty industrial machinery and high-tech industries, especially in the fields of food, medicine, pharmaceutical products, biotechnology and oil and natural gas.
According to Ms Auramon, the planned FTA with Efta will cover new trade issues such as intellectual property, government procurement and trade competition.
Efta has relatively high standards and trade regulations, meaning Thai entrepreneurs wanting to trade with this bloc need to develop or upgrade their production in line with international standards, she said.
Ms Auramon said this serves as an opportunity for Thailand to raise standards and regulations to be in line with international levels, which will benefit the country.
According to data from the Board of Investment (BoI), Efta investors applied for BoI promotions in 16 projects valued at 12.9 billion baht, ranked eighth among total FDI applications in Thailand.
FTA negotiations with Efta were initiated from 2005-2006, but then came to a halt.
Efta has expressed interest in reopening talks on an FTA with Thailand since 2019 and the department commissioned the Institute for Future Studies for Development to conduct a study on possible impacts.
The study found an FTA with Efta will help boost Thailand's leverage and competitiveness for Thai products and services in the bloc, as well as attract investors specialising in high technology and innovations to Thailand.
The study projected Thai exports to Efta would increase by 38% to US$262 million, while imports from Efta would increase by 14.8% to $210 million.
Thailand's overall GDP is expected to increase by 0.179 percentage points or $898 million.
Efta was Thailand's 17th-largest trading partner in 2021. Thailand-Efta trade volume last year stood at $7.5 billion, representing 1.39% of Thailand's total trade.
Important exports included gems and jewellery, watches and parts, automobiles and auto parts, travelling appliances, cars, accessories and components, machinery and mechanical components, air conditioners and components, cosmetics, soaps and skin care products, and canned and processed seafood.
Prominent imports included jewellery, gems, silver bars, gold, clocks and components, edible meat, pharmaceuticals and medical products.
Thailand has 14 FTAs with 18 countries, including the Regional Comprehensive Economic Partnership, which came into force earlier this year.
Efta has FTAs with 29 countries including South Korea, Hong Kong, Canada, Peru, Chile, Panama, Mexico, Turkey, Singapore, Indonesia and the Philippines.
Malaysia and Vietnam are already in the process of negotiating FTAs with Efta.
