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Basic Information of Thailand in Details.

Thailand is a country at the centre of the Indochinese peninsula in Southeast Asia. With a
total area of approximately 513, 000 km2 (198,000 square miles), Thailand is the world's
51st-largest country. It is the 20th-most-populous country in the world, with around 66
million people. The capital and largest city is Bangkok.

Thailand is a constitutional monarchy and has switched between parliamentary

democracy and military junta for decades, the latest coup being in May 2014 by the National
Council for Peace and Order. Its capital and most populous city is Bangkok. It is bordered to
the north by Myanmar and Laos, to the east by Laos and Cambodia, to the south by the Gulf
of Thailand and Malaysia, and to the west by the Andaman Sea and the southern extremity of
Myanmar. Its maritime boundaries include Vietnam in the Gulf of Thailand to the southeast,
and Indonesia and India on the Andaman Sea to the southwest.

The Thai economy is the world's 20th largest by nominal GDP and the 27th largest by
GDP at PPP. It became a newly industrialised country and a major exporter in the 1990s.
Manufacturing, agriculture, and tourism are leading sectors of the economy. It is considered a
middle power in the region and around the world.




Economic System, Politic System, and Legal System of Thailand.

a) Economic System
The 2013 Human Development Report presents Human Development Index (HDI) values and
ranks for 187 countries and UN-recognized territories, along with the Inequality-adjusted
HDI for 132 countries, the Gender Inequality Index for 148 countries, and the
Multidimensional Poverty Index for 104 countries. Country rankings and values in the annual
Human Development Index (HDI) are kept under strict embargo until the global launch and
worldwide electronic release of the Human Development Report.
It is misleading to compare values and rankings with those of previously published
reports, because the underlying data and methods have changed. Readers are advised in the
Report to assess progress in HDI values by referring to table 2 (Human Development Index
Trends) in the Statistical Annex of the report. Table 2 is based on consistent indicators,
methodology and time-series data and thus shows real changes in values and ranks over time
reflecting the actual progress countries have made. Caution is requested when interpreting
small changes in values because they may not be statistically significant due to the sampling
variation. Generally speaking, changes in third decimal of all composite indices are
considered insignificant.


Human Development Index (HDI)

The HDI is a summary measure for assessing long-term progress in three basic dimensions of
human development: a long and healthy life, access to knowledge and a decent standard of
living. As in the 2011 HDR a long and healthy life is measured by life expectancy. Access to
knowledge is measured by: i) mean years of schooling for the adult population, which is the
average number of years of education received in a life-time by people aged 25 years and
older; and ii) expected years of schooling for children of school-entrance age, which is the
total number of years of schooling a child of school-entrance age can expect to receive if
prevailing patterns of age-specific enrolment rates stay the same throughout the child's life.



Standard of living is measured by Gross National Income (GNI) per capita expressed in
constant 2005 international dollars converted using purchasing power parity (PPP) rates.
To ensure as much cross-country comparability as possible, the HDI is based primarily on
international data from the United Nations Population Division, the United Nations
Educational, Scientific and Cultural Organization (UNESCO) Institute for Statistics (UIS)
and the World Bank. As stated in the introduction, the HDI values and ranks in this years
report are not comparable to those in past reports (including the 2011 HDR) because of a
number of revisions done to the component indicators by the mandated agencies. To allow for
assessment of progress in HDIs, the 2013 report includes recalculated HDIs from 1980 to


Thailands HDI value and rank

Thailands HDI value for 2012 is 0.690in the medium human development category
positioning the country at 103 out of 187 countries and territories. Between 1980 and 2012,
Thailands HDI value increased from 0.49 to 0.690, an increase of 41 percent or average
annual increase of about 1.1 percent.
The rank of Thailands HDI for 2011 based on data available in 2012 and methods
used in 2012 was 104 out of 187 countries. In the 2011 HDR, Thailand was ranked 103 out
of 187 countries. However, it is misleading to compare values and rankings with those of
previously published reports, because the underlying data and methods have changed.
Table A reviews Thailands progress in each of the HDI indicators. Between 1980 and
2012, Thailands life expectancy at birth increased by 8.8 years, mean years of schooling
increased by 2.9 years and expected years of schooling increased by 4.4 years. Thailands
GNI per capita increased by about 251 percent between 1980 and 2012.



Table A: Thailands HDI trends based on consistent time series data, new component
indicators and new methodology

Figure 1 : below shows the contribution of each component index to Thailands HDI
since 1980.

Figure 1 : Trends in Thailands HDI component indices 1980-2012




Assessing progress relative to other countries

Long-term progress can be usefully assessed relative to other countriesboth in terms of

geographical location and HDI value. For instance, during the period between 1980 and 2012
Thailand, Indonesia and Philippines experienced different degrees of progress toward
increasing their HDIs (see figure 2).

Figure 2: Trends in Thailands HDI 1980-2012

Thailands 2012 HDI of 0.690 is above the average of 0.64 for countries in the
medium human development group and above the average of 0.683 for countries in East Asia
and the Pacific. From East Asia and the Pacific, countries which are close to Thailand in 2012
HDI rank and population size are Vietnam and Philippines, which have HDIs ranked 127 and
114 respectively (see table B).



Table B: Thailands HDI indicators for 2012 relative to selected countries and groups


Inequality-adjusted HDI (IHDI)

The HDI is an average measure of basic human development achievements in a country. Like
all averages, the HDI masks inequality in the distribution of human development across the
population at the country level. The 2010 HDR introduced the Inequality Adjusted HDI
(IHDI), which takes into account inequality in all three dimensions of the HDI by
discounting each dimensions average value according to its level of inequality. The HDI
can be viewed as an index of 'potential' human development and the IHDI as an index of
actual human development. The loss in potential human development due to inequality is
given by the difference between the HDI and the IHDI, and can be expressed as a percentage.
(For more details see technical note 2).

Thailands HDI for 2012 is 0.690. However, when the value is discounted for
inequality, the HDI falls to 0.543, a loss of 21.3 percent due to inequality in the distribution
of the dimension indices. Vietnam and Philippines, show losses due to inequality of 14
percent and 19.9 percent respectively. The average loss due to inequality for medium HDI
countries is 24.2 percent and for East Asia and the Pacific it is 21.3 percent.



Table C: Thailands IHDI for 2012 relative to selected countries and groups


Gender Inequality Index (GII)

The Gender Inequality Index (GII) reflects gender-based inequalities in three dimensions
reproductive health, empowerment, and economic activity. Reproductive health is measured
by maternal mortality and adolescent fertility rates; empowerment is measured by the share
of parliamentary seats held by each gender and attainment at secondary and higher education
by each gender; and economic activity is measured by the labour market participation rate for
each gender. The GII replaced the previous Gender-related Development Index and Gender
Empowerment Index. The GII shows the loss in human development due to inequality
between female and male achievements in the three GII dimensions. (For more details on GII
please see Technical note 3 in the Statistics Annex).

Thailand has a GII value of 0.36, ranking it 66 out of 148 countries in the 2012 index.
In Thailand, 15.7 percent of parliamentary seats are held by women, and 29 percent of adult
women have reached a secondary or higher level of education compared to 35.6 percent of
their male counterparts. For every 100,000 live births, 48 women die from pregnancy related
causes; and the adolescent fertility rate is 37 births per 1000 live births. Female participation
in the labour market is 63.8 percent compared to 80 for men.

In comparison Vietnam and Philippines are ranked at 48 and 77 respectively on this




Table D: Thailands GII for 2012 relative to selected countries and groups


Multidimensional Poverty Index (MPI)

The 2010 HDR introduced the Multidimensional Poverty Index (MPI), which identifies
multiple deprivations in the same households in education, health and standard of living. The
education and health dimensions are based on two indicators each while the standard of living
dimension is based on six indicators. All of the indicators needed to construct the MPI for a
household are taken from the same household survey. The indicators are weighted, and the
deprivation scores are computed for each household in the survey. A cut-off of 33.3 percent,
which is the equivalent of one-third of the weighted indicators, is used to distinguish between
the poor and non-poor. If the household deprivation score is 33.3 percent or greater, that
household (and everyone in it) is multi-dimensionally poor. Households with a deprivation
score greater than or equal to 20 percent but less than 33.3 percent are vulnerable to or at risk
of becoming multi-dimensionally poor.

The most recent survey data available for estimating MPI figures for Thailand were
collected in 2005/2006. In Thailand 1.6 percent of the population lived in multidimensional
poverty (the MPI head count) while an additional 9.9 percent were vulnerable to multiple
deprivations. The intensity of deprivation that is, the average percentage of deprivation
experienced by people living in multidimensional poverty in Thailand was 38.5 percent.
The countrys MPI value, which is the share of the population that is multi-dimensionally
poor adjusted by the intensity of the deprivations, was 0.006. Viet Nam and Philippines had
MPI values of 0.017 and 0.064 respectively.



Table E compares income poverty, measured by the percentage of the population

living below PPP US$1.25 per day, and multidimensional deprivations in Thailand. It shows
that income poverty only tells part of the story. The multidimensional poverty headcount is
1.2 percentage points higher than income poverty. This implies that individuals living above
the income poverty line may still suffer deprivations in education, health and other living

Table E also shows the percentage of Thailands population that live in severe poverty
(deprivation score is 50 percent or more) and that are vulnerable to poverty (deprivation score
between 20 and 30 percent). The contributions of deprivations in each dimension to overall
poverty complete a comprehensive picture of people living in poverty in Thailand. Figures
for Vietnam and Philippines are also shown in the table for comparison.

Table E: The most recent MPI figures for Thailand relative to selected countries



b) Politic System
The politics of Thailand are

currently conducted





a constitutional monarchy, whereby the Prime Minister is the head of government and
a hereditary monarch is head of state. The judiciary is independent of the executive
and the legislative branches.


Politics of Constitutions
Before the Revolution of 1932, the kingdom had no written constitution. The monarch
was the originator of all laws and the head of the government. In 1932 the first written
constitution was promulgated, expected to be the most important guideline of the


Government of Thailand
Three major independent authorities -executive, legislative, and judicial. The head of
government is the Prime Minister. Under the present constitution, the Prime Minister
must be a Member of Parliament.


Foreign relations of Thailand

Thailand's foreign policy includes support for ASEAN.
Thailand participates fully in international and regional organizations. It has
developed increasingly close ties with other ASEAN membersIndonesia, Malaysia,
the Philippines, Singapore, Brunei, Laos, Cambodia, Burma, and Vietnam.


Political parties and elections

Summary of the 23 December






Thailand Thai general election.


Political history of the democratic era

Transition to Democracy after 1932



Following the 1932 revolution which imposed constitutional limits on the monarchy,
Thai politics were dominated for a half century by a military and bureaucratic elite,
with support of businessmen and big entrepreneurs.

c) Legal System
Thailand laws follow the pattern of civil law countries of conventional Europe. When a
dispute is brought before the judge, the court will decide a case based on an interpretation of
the statutory provisions. The court's interpretation is not as broad as that of a court in a
common law country and unlike a common law court; its decision will not develop a body of
law. Although, interpretations by the highest courts (Dika Court or Supreme Court) become
precedent under the doctrine of stare deices.

Thailand laws derive from two major sources; the legislative and executive branches of
both central and local governments. The judicial decisions are not law because they apply to
an individual; not withstanding the fact that that the court will normally adhere to precedent
for subsequent cases with the same situation in order to attain stability and fairness. Reversal
of precedent based on decisions however though not happen very often.

Constitutional Law

A constitutional based law defines the powers and the relationship of the three branches of
Government to each other and the relationship between the Government and citizens in
regards to fundamental rights and responsibilities.


An act is the most common known law and is made by parliament. Examples of Acts are the
Copyright Act, Trademark Act and Investment promotion Act.

Royal Decree




A Royal decree is promulgated by the Executive Branch normally though the Minister of the
concerned Ministry authorized under a specific Act to set forth the details from time to time
under the guidelines of the Act. For example, a Royal Decree to revise the tax rates under the
Revenue Code.

Emergency Degree

An emergency Decree is enacted by the executive branch, though the cabinet in an

emergency to protect the country from imminent harm but subject to subsequent confirmation
of the Parliament.


The civil and commercial code, penal code, civil and Criminal Procedure Codes are well
known features of civil law countries legal system. Initially, codified law consisted of
multiple chapters of subject matter, but this is no longer necessary.

Administrative Agency orders

Administrative agencies are empowered by the legislature to promulgate rules and

regulations to carry out government functions.

Cabinet Resolutions

Cabinet Resolutions have no binding effect but will influence the Government Agencies in
the enforcement or interpretation of rules and regulations.

Municipal Ordinances

Building, health and city planning codes are examples of local government laws.


The Judicial System




Thailand has three classes of courts which can be classified by their retrospective methods of

Courts of first instance (Trial Courts)

Courts of first instance (Trial Courts) conduct the original trial of cases and render decisions.
The judge decides both issues of fact and law. In a big province such as Bangkok, Courts of
first Instance may be called differently depending on their subject matter jurisdiction, such as
Civil Court, Criminal Court, Labour Court or Juvenile and Family Court. In rural areas, a
Provincial Court has jurisdiction over all matters subject to a few exceptions.

The Court of Appeals

If a party disagrees with the decision of the lower court, they can appeal to a Court of
Appeals, The court of Appeals will normally entertain legal issues rather than factual issues.

Dika Court (Supreme Court)

Subject to the statutory prohibitions, a party who disagrees with the decision of the court of
appeals can take its case to Dika Court (Supreme Court). The decision of Dika Court is final.
In a civil suit, an interested party may initiate proceedings by filing a complaint or petition to
a court having jurisdiction over the matter. In a criminal suit, only the individual injured party
may be a plaintiff alone or joint plaintiff with the public prosecutor depending upon the type
of offense.

Foreign Judgment
Thailand does not recognize foreign judicial judgments. A party may not enforce a judgment
adjudicated in a foreign country and a new proceeding must be initiated.
However foreign arbitrate awards are recognized and enforceable under the Arbitration Act of
B.E. 2530 (A.D. 1987); providing that such arbitrate award is covered by a treaty, convention
or international agreement to which Thailand is a party and will have effect only as far as
Thailand accedes to be bound.




Enforcement of Foreign Arbitral Award

Foreign arbitral award refers to an award resulting from arbitration, the proceedings of which
were in whole, or in the most part, conducted outside Thailand and wherein one of the parties
involved in the dispute was not a person of Thai nationality.

Under Section 29 of the Arbitration Act of 1987, a foreign arbitral award will be
recognized and enforceable in Thailand, only if it is made in accordance with bilateral or
multilateral treaties or conventions which Thailand is a party of or has acceded to.

Currently, these treaties and conventions are the 1927 Convention on the Enforcement
of Foreign Arbitral Awards (Geneva Convention); the 1958 Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (New York Convention); and the Treaty of
Amity and Economic Relations between the Kingdom of Thailand and the United States of

The Arbitration Act of 1987 expressly states that the action for enforcement of arbitral
award (by way of a confirmed judgment) must be initiated in a Thai court within one year
from the date the award was sent to the parties by the arbitrators. The Act also states clearly
the preconditions for enforcement as well as the reservations made by Thailand under both
the Geneva and New York conventions. For instance, the court may refuse recognition if the
subject matter of the dispute is not resolvable by arbitration or the recognition would be
contrary to public policy or the good morals of Thailand. In addition, it must be legally valid
and final in the country where the arbitration was held and at least one of the parties to the
dispute must be a subject of one of the member countries of these conventions.

Entering Arbitration
Thai courts will compel arbitration if a written agreement to arbitrate exists between the
Interlocutory arbitration may be sanctioned by the courts upon the written request from the
litigants concerned, if the court's view is that expeditions and fair resolutions of the cases can



be achieved by arbitration. Such a request may be made at any time during the trial, but must
be submitted before the final judgment. An arbitrator will be appointed pursuant to the
agreement of the litigants. Failing such an agreement, the court may appoint any arbitrator as
it deems appropriate.

Pre-hearing Procedure
Pre-arbitration remedies are available as "temporary measures before judgment". Good cause
must be shown to the court by a petitioner, that there is an urgent necessity to protect his
interests during the arbitration proceedings. Temporary measures are granted by the court in
the form of orders for attachment, seizure, restraint or through a cease, or desist order.
There are no definite requirements regarding advanced notice to the parties concerned. The
court merely wishes to be satisfied that an action by one party be made known to the other
party and that this party has sufficient time to respond.

Procedure at the Hearing

Before giving an award, the arbitrators are required to hear all the parties and may make
inquiries as they deem appropriate. In the absence of a written agreement of the parties
concerned or an order of the court, the arbitrators are also empowered to define issues or
disputes and to adopt their own rules and procedures for hearings. The parties may present
evidence and examine or cross-examine witnesses during the arbitration proceedings.
Through the authority of the court, the arbitrators may summon documents, subpoena
witnesses and request witnesses to testify under oath. The rules of evidence and procedure
stipulated in the Civil Procedures Code may be made applicable to arbitration mutates
mutandis. Arbitrators' fees may be fixed by agreement of the parties or by the courts.
Witnesses' fees may be fixed by the arbitrators, taking into consideration the "going rates",
which are generally approved by the courts.

Institutional Arbitration
An institutional arbitration may be conducted in Thailand under the auspices of either the
Arbitration Tribunal of the Board of Trade (The Thai Chamber of Commerce) or under the
rule called the "Thai Commercial Arbitration Rules", which were modeled after the ICC's



Conciliation and Arbitration Rules. The Arbitration Office of the Ministry of Justice adopts
its own arbitration rules. These rules are quite comprehensive and substantially reflect a
constructive combination of the ICC's, UNICITRAL's and American Arbitration Association's
rules. The Office has maintained a list of experts and experienced persons, 128 in total, who
are capable of serving as arbitrators in such areas as labour, investment, international trade,
maritime law, intellectual property, insurance, land, minerals and petroleum, torts and
contracts, etc. The Office also makes available to interested parties facilities and office
equipment for conciliation and arbitration proceedings at a nominal cost.

Thailand, with its King as Head of State, bases its judicial and legal systems on the
democratic nation's Constitution, which recognizes four courts: the Constitutional Court, the
Courts of Justice, the Administrative Court, and the Military Court.

The responsibilities of each court varies :

The Constitutional Court renders judgment or decision on the constitutionality of the
provisions of law and other powers as provided for in the Constitution and other laws.

The Administrative Court tries and adjudicates administrative disputes between the
private sector and State organs concerning the issue of abuse of power by such State

The Military Court tries and adjudicates cases involving persons within its jurisdiction
as prescribed by the Act for the Organization of the Military Court B.E. 2498 (AD 1955).

The Courts of Justice try and adjudicate all cases except those specified by the
Constitution or other laws to be within the jurisdiction of other courts.

The Courts of Justice are classified into three levels: the Courts of First Instance, the
Courts of Appeal, and the Dika Court (Thailand's Supreme Court).




The Courts of First Instance are trial courts that consist of general courts, juvenile and
family courts, and specialized courts. All cases commence at a Court of First Instance.
Appeals against Court of First Instance judgments shall be filed with the Court of Appeals,
subject to certain restrictions.

The Supreme (Dika) Court has jurisdiction over cases appealed from the Court of
Appeals, subject to certain restrictions provided by the Civil Procedure Code, Criminal
Procedure Code, and other procedural laws/codes applicable for proceedings carried out in
the specialized courts, i.e. in the Labour Court, the Tax Court, the Intellectual Property and
International Trade Court, and the Bankruptcy Court. Thailand generally follows the civil law
system. However, one must realize that Thailand belongs to the civil law system only by the
fact of its codification. The contents of the codes are as varied as the major legal systems of
the world.





Government Intervention
Instruments Used by the Government of Thailand.

The Kingdom of Thailand has been a WTO member since January 1995, and has made steady
progress in recent years towards trade liberalization, as well as restructuring its public sector
and strengthening its financial system. Thailand has already reached the halfway point in
fulfilling its trade and investment liberalization targets under the Bogor Declaration among
Asia-Pacific states. This commitment aims to reduce barriers to trade and investment by
promoting the free flow of goods, services and capital among Asian-Pacific economies (for
developed and developing countries by the years 2010 and 2020, respectively). The Thai
government is pursuing a "dual track" approach of strengthening the domestic economy while
integrating into the global economy through export growth and market diversification into
high-valued products.

Thailand is also advocating for a network of bilateral preferential trading

arrangements, particularly within the Asian/South Pacific region, including the establishment
of an ASEAN-China Free Trade Area within ten years, the formation of an East Asia Free
Trade Area between ASEAN members, China, Japan, and Korea (ASEAN plus Three), and
an ASEAN-Japan Economic Partnership.

The United States, Thailand's largest trading partner (Thailand ranks 18th among U.S.
trading partners), is currently in negotiations with the Thai government for a free-trade
agreement that would expand market and investment access between the countries. U.S.
investors are already exempt from barriers to investment due to a 1966 treaty.




Agriculture accounts for nearly half of employment in Thailand and 20% of exports,

though it only makes up about 9% of GDP. Within the WTO, Thailand has delineated a set of
specific demands for freer global farm trade, geared toward reducing high import tariffs on
farm products and export subsidies that distort global farm prices. It has called for the
maximum final import duty rate to be set at 25% and for the complete elimination of export
subsidies by developed countries within three years. However, Thailand does have high
levels of tariff protection against imports for certain agricultural products, averaging 26%
agricultural tariff protection, compared to only 13% overall tariffs on imports.

The secretary-general of Thailand's Joint WTO Committee has encouraged

developing countries to form alliances to strengthen their bargaining positions, and the Thai
private sector has engaged in talks with neighboring countries such as Indonesia, Malaysia,
China, the Philippines and Vietnam on the topic of agriculture issues. Thailand is a member
of the Cairns Group of 17 agricultural exporting countries pushing for deep cuts in tariff rates
and the elimination of all export subsidies. With the continued advocacy of the newly
cohesive G-20 group of developing countries at the Cancun ministerial meetings in
November 2004, the elimination of developed country export subsidies will continue to be an
important issue in the Doha Round.

Thailand recently joined Australia and Brazil in challenging European export

subsidies on sugar, which could have important repercussions on both European and
American policies of sugar subsidization, which developing countries claim is keeping the
price of sugar depressed by up to 40%.

Trade-Related Intellectual Property Rights

Along with Brazil and India, Thailand is one of the few developing countries that

have the pharmaceutical sector capacity to produce generic drugs for pandemic diseases like
HIV/AIDS, which can be exported to other developing countries who cannot afford patented
drug prices. With its generic production capability, Thailand supplies antiretroviral AIDS



drugs to 10% of its HIV-positive population, a much higher figure than other Asian countries
facing the HIV/AIDS pandemic, and is currently exporting drugs to Cambodia, Laos, and
Burma, countries that do not have the capacity to produce their own generic drugs. However,
many Thai HIV/AIDS activists, as well as international groups such as Doctors Without
Borders are afraid that the upcoming free trade agreement with the United States will include
much more stringent intellectual property protection provisions, similar to provisions
included in recent U.S. agreements with Singapore, Chile, and Morocco, that will put
Thailand's generic drug production in jeopardy.

Food Safety
In February 2003, Thailand introduced more stringent safety tests on food imports

from the EU, Japan and the US, conducted on "a non-discriminatory basis" and "based on
scientific evidence." Authorities say that the Kingdom is pursuing world standards for foodsafety testing, not retaliating against any other countries policies, such as the strict testing
long encountered by Thai shrimp and poultry exporters in the EU and the US. The tighter
measures, however, will first be applied to agricultural goods including fruit, canned
products, milk, cheese and butter mainly from the EU and the US, and then followed by
inspections of industrial products.

Investment and Competition

WTO director-general and former Thai government official Supachai Panitchpakdi

has urged Thailand to get involved in designing a framework for negotiations of multilateral
rules for investment and competition. The country has experience in both issues, and it holds
a set of domestic regulations that would likely be affected by such rules. However, the
Singapore Issues concerning investment and competition proved to be quite contentious at the
Cancun Ministerial Meeting, and it is still unclear how much progress will be made, if at all,
on these issues during the Doha Round.

Thailand officially ceased offering preferential tax incentives through its Board of
Investment (BoI) at the end of 2003. However, the privileges, which are offered in the forms



of eight-year waivers on corporate taxes, as well as discounts or waivers on machinery import

taxes, may still be granted by petition for future exemptions on a year-by-year basis. Thus,
companies operating in Thailand with these privileges - mostly electronics, electrical
appliance and agribusiness firms - would see their tax and tariff exemptions cut off by 2005
at the soonest. Many American companies benefit from these policies, and have invested an
estimated $16 billion in Thailand.

Textiles and Clothing

Thai exports of textiles and clothing, which account for about 8% of its total exports,

anticipate increased competition from countries including China and Vietnam after the
beginning of the quota-free global trading which will begin on 1 Jan 2005 under the WTO
Agreement on Textiles and Clothing (ATC). Many hope that an upcoming free trade deal with
the United States will lessen the negative impact of increased competition in textiles.

The policy mechanism to promote trade between Thailand and neighbouring countries at
different levels are formulated as follows:

A. Foreign and international economic policy statement of Thailand

With respect to macro foreign and international economic policies, the Royal Thai
Government (2009) proactively reaffirms initiatives to advance cooperation and diplomatic
ties with all countries particularly in political, security, economic, social and cultural
relations. This will be carried out in order to optimally bring about benefits to the country and
their citizen.

B. Thailands existing policy mechanism and perspectives in promoting trade with

neighbouring countries at different levels
Thailand placed significant priority on building strong relations and development partnership
with neighbouring countries through key regional economic cooperation frameworks
particularly Association of South East Asian Nations (ASEAN), Greater Mekong Subregion



(GMS), Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS),

Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) and Bay of Bengal Initiative for
Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). Thailand also desired to
exploit international economic relationships for enhancing national competitiveness.
However, ASEAN and GMS are among primary main concern.


Association of South East Asian Nations (ASEAN) Level

ASEAN is an important economic bloc for Thailand. ASEAN composes of 3 key goals
namely ASEAN Security Community, ASEAN Economic Community and ASEAN SocioCultural Community. Particularly for ASEAN Economic Community (AEC), it is planned to
reach the goal by 2015. In terms of trade, Thailand places significant emphasis on upholding
ASEAN Free Trade Area (AFTA). Therefore, Thailand has formulated their own ASEAN
Hub policy under the theme Sustaining trading and investment base of Thailand for
moving toward the global markets which consists of 5 strategies as follows:

Opportunities Searching & Market Approach Strategy: This is due to ASEAN is a

central and competitive market and investment base for Thailand particularly in
Cambodia-Lao-Myanmar and Vietnam (CLMV). Therefore, Thailand should maintain
ASEAN as a strong investment platform in order to compete internationally.

Relationship Enhancement Strategy: This is an important component in facilitating

trade at all levels: business to business, people to people, etc. CLMV are among the
main targeted countries. As these countries share common border with Thailand, trade
disputes can be usually occurred. But it should be managed in the extent that does not
affect international trade and cross-border trade environment.

Trade & Investment Promotion Strategy: This is undertaken through marketing

activities in order to promote better image of Thai products and services within
ASEAN region.




Trade & Investment Penetration Strategy: This is carried out by means of

establishment of Thailands distribution centers and trading firms in ASEAN member

Global Reach & Outsourcing Strategy: Some countries in ASEAN are suitable for
Thailand to relocate particular productive industry as they are abundant of both cheap
labour and raw materials. In addition, it is prospective to promote contract farming so
that it can then be either processed in those ASEAN member countries or exported to
Thailand for further processing.


How Thailand Implement the Instruments?

As Thailand has taken the rotational term as Coordinating Country of ASEAN from 20092010, the Royal Thai Government hence plans to lead for building greater internal and
external strength of ASEAN towards the goal of AEC in the year 2015. In addition, Thailand
also promotes trade and investment toward East Asian and South Asian regions as well as
actively engaging with other regions in the world. It is clearly observable that Thailand
regards ASEAN as growing and high potential single market under AFTA. Due to
geographical advantage, Thailand then wants to turn ASEAN, an emerging market, into trade
and production platform which Thai products and services are quite well accepted among
ASEAN consumers. CLMV are among competitive markets for Thailand to penetrate in.

In fact, Thailand has been facing certain extent of trade discrimination (protectionism)
from these neighbouring countries as they fear that Thai products will dominate their
markets. Consequently, it is essential for Thailand to also do aid for trade in order to build
trust and confidence as well as promoting mutual or win-win benefits with less advanced
CLMV in particular and other needed ASEAN member countries in general. ASEAN opens
up opportunities for Thailand to gain wider access to sourcing of cheaper raw material as well
as being attractive investment destinations for Thai investors which partly can be used as a
means to bridge development disparities particularly with CLMV. ASEAN is becoming more



institutionally formalized arrangement implemented through a range of sectoral and spatial

integration programs and projects. This politically and economically stronger economic bloc
attracts larger economies to be linked with e.g. China, Japan, Korea, European Union,
Australia, New Zealand and being discussed is India.

As a result, ASEAN tends to have more negotiation power, greater market access as
well as potential networking of regional production networks with partner countries. It is
likely that ASEAN undertakings are on track though there is still long way to attain
particularly for the AEC goal. Internally, larger and more advanced economies like Thailand
together with Malaysia, Singapore, Indonesia, etc. should continue rendering some assistance
in the form of intensifying trade privileges, market access and technical cooperation to less
advanced countries in overcoming international development disparities so that shared
growth and prosperity can be eventually realized. It is also necessary for ASEAN member
countries to ensure that this regionalization will bring about equal or proportionate benefits to
all peoples both in urban and rural areas with special attention to be paid to the poor,
marginalized, farmers and the excluded groups.


Regional Economic Integration


Countries that involve with the regional economic integration with Thailand.

Greater Mekong Sub-region (GMS) Level

The GMS was initiated in 1992 to foster regional economic cooperation and integration
consisting of six countries namely Cambodia, Lao PDR, Myanmar, Yunnan and Guangxi
Zhuang provinces of China, Thailand and Vietnam. GMS is very meaningful for Thailand.
Trade and investment is an important sector out of 9 areas of cooperation. As a result,
Thailand has directed the main policies to promote greater cross-border trade flows with
GMS member countries as follows:

Increase volume and values of cross-border trade and transit trade in order to
continuously keep pace with the growth of GMS regional economy. This is fulfilled
by actively promoting and facilitating intra-GMS and extra-GMS trade particularly on



agricultural trade, investment and tourism through the implementation of CrossBorder Transport Agreement (CBTA) (with total 20 annexes) aiming to deal with
speedy facilitation of customs and immigration procedures at the priority bordercrossing points thus resulting in increases trade flow both intra-GMS and extra-GMS.

Establish border economic zones along GMS economic corridors by adopting coproduction and cross-border supply chains schemes with city pairs as well as
seriously taking cooperation on labour management with neighbouring countries into
account. This will become new regional production networks in ASEAN, widen up
market access to neighbouring countries as well as facilitating transit trade to large
nearby markets in China, South East Asian, South Asian and East Asian regions, and
global markets.

Undergo cross-border trade reform towards international standard system so that it

can solve cross-border trade problems, improve faster customs procedures, as well as
extending assistance to develop necessary infrastructure in linking with neighbouring
countries. This will help facilitate trade, reduce production cost as well as boosting
degree of national competitiveness.

Explore new markets. And cross-border markets will not only be confined to border
areas but will also be linked up with the rest of domestic markets of neighbouring
countries as well as further transiting to the nearby large neighbouring countries
markets. This will therefore open up new markets access for Thailands and coproduction products.

Promote contract farming in neighbouring countries in order to increase supply of raw

materials for industrial and energy sectors both along border areas and in respective
interior regions of Thailand.




Relocate some industrial, agricultural and services investments to neighbouring

countries in order to help generate jobs, distribute income and narrow development
gaps between Thailand and neighbouring countries in parallel with sharing of natural
resources, labour, capital, technology and expertise. The targeted industries are agroprocessing, wood industries, sugar industry, energy, construction, tourism, and hotel
and services.

Keenly negotiate transit trade regime with neighbouring countries e.g. Lao PDR,
Myanmar and Vietnam to facilitate freer flow of goods to nearby neighbouring
countries markets in South East Asian, South Asian, and East Asian regions.

Furthermore, Thailand has initiated and led the ACMECS in order to exploit economic
complementarities between Thailand and CLMV especially through integrated cross-border
development. This initiative is endeavoured to help bridge development disparities in the
GMS. There are 5 major sectors of cooperation namely trade facilitation, agriculture and
industry, transport, tourism and health. Specifically for trade facilitation, Thailand will ease
greater flows of goods, services and investments among member countries so as to stimulate
significant employment generation. It is obvious that there is a synergy of Thailands crossborder trade policies toward GMS and ACMECS. It is also remarkable that Thailands trade
policies for the GMS is convergent with the advancement of physical infrastructure
development particularly for the GMS Economic Corridors and Asian Highway routes
connecting Thailand and neighbouring countries which can help match policy supports for
expanding cross-border trade activities and actions for promoting speedy flows of goods,
services and people. In addition, The GMS Economic Corridors reinforce the geopolitics of
Thailand as intersection in linking with countries in Asian region notably East Asian: China,
South Asian: India, Bangladesh, Nepal, Sri Lanka, and Bhutan, South East Asian: Vietnam,
which will help to reduce land transport distance for Thai products to penetrate into these

In this regard, Thailand should grasp these advantages in building up closer economic
and social ties with neighbouring countries due to it offers great opportunities to be exploited



or cooperated. Border economic zones in conjunction with trade facilitation are perceived
playing crucial role in materializing these benefits. Joint production along border areas
between Thailand and neighbouring countries particularly Myanmar, Lao PDR and Cambodia
could foster strong regional production networks as well as enhancing national and regional
competitiveness to compete with flood of Chinese products into GMS markets.

Bilateral Level
At bilateral level particularly with Myanmar, Lao PDR and Cambodia, the explicit polices
center around development of regional transport (international highways, Mekong bridges
and river piers) and logistics systems linking with these neighbouring countries especially
along the North-South and East West Economic Corridors as well as improving facilities for
cross-border trade at key border checkpoints.

As the Royal Thai Government had sometimes changed, this consequently led to the
absence of consistent cross-border trade policies. The explicit cross-border trade policies
included specific improvement plans at selected border locations connecting with respective
neighbouring countries. As cross-border trade patterns are varied from one country to
another, thus there existed a number of measures to respond to cross-border trade problems
with individual neighbouring country which can presumably be regarded as implicit bilateral
cross-border trade policies. These measures have been formulated and implemented by
Ministry of Commerce as follows:

The specific measures to support cross-border trade between Thailand and Myanmar are as

Improve facilities and logistics system to facilitate cross-border trade in Maesod

district, Tak province and Sinkhon checkpoint in Prachuab Kirikhan province.

Promote closer trade relations between Thailand and Myanmar in the form of Joint
Trade Commission and exchange of bilateral visit of Ministers of Commerce.



Hold regular consultation for both public and private sectors in order to resolve
problems and constraints on cross-border trade.

Continually advance cross-border trade through salient policies and implementation

including strengthening public-private partnership as well as designating local
agencies to facilitate cross-border trade towards international standard.

Closely coordinate with Myanmar for establishing border economic zones in order to
boost the growth of cross-border trade.

Thailands agency for providing assistance to Thai businesses and investors in doing
business in neighbouring countries similar to JETRO of Japan should be established.

Organize Thai Trade Fair in Myanmar for publicizing the image of Thai products as
well as inviting Myanmar businesses to participate in Trade Fair in Thailand, for
example, Jewelry Fair which can aid Thailand to become a regional jewelry trading

There is still much task to do for promoting cross-border trade with Myanmar. This is caused
by different stages of development. Political uncertainty in Myanmar might sometimes lead
to one-sided closure of the border checkpoint. Institutional mechanisms to strengthen close
coordination of agencies responsible for resolving problems of cross-border trade locally and
nationally should be functional. Financial facilities e.g. currency exchange and banking
services should be in place. Technical assistance from Thailand in relevant aspects of crossborder trade should be rendered to Myanmar so that simplification of procedures and
payments up to international standard can be enhanced. Both countries may also explore how
to bring down trade discrimination or non-tariff trade barriers particularly from Myanmar
side. Joint border economic zone and cross-border investments linking Maesod district, Tak
province with Myawaddy city, Myawaddy province of Myanmar should be materialized.
Thailand should keep up conferring trade privileges and market access particularly on
agricultural goods to Myanmar.




Laos PDR
The specific measures to support cross-border trade between Thailand and Lao PDR are as

Improve facilities and logistics system to facilitate cross-border trade at Nongkhai

checkpoint in Nongkhai province, Mukdaharn checkpoint in Mukdaharn province and
Chokmek checkpoint in Ubolratchathani province.

Hold regular discussion for both public and private sectors in order to resolve
problems and constraint on cross-border trade.

Government agencies should provide assistance and consultation to Thai private

sectors so that it can minimize risk in doing business in Lao PDR.

Thailand should pursue third country or international lending agencies for rendering
infrastructure development in Lao PDR.

Continually advance cross-border trade through salient policies and implementation

including strengthening public-private partnership as well as reinforcing local
agencies to facilitate cross-border trade towards international standard.

Closely coordinate with Lao PDR for establishing border economic zones in order to
boost the growth of cross-border trade.

Thailands agency for providing assistance to Thai businesses and investors in doing
business in neighbouring countries similar to JETRO of Japan should be in place.

There is also still much task to do for promoting cross-border trade with Laos PDR. This is
caused by different stages of development. Cross-border trade imbalances between Thailand
and Laos PDR led to the setting up of complex trade regulations and procedures particularly
on Laos side so as to probably protect their domestic market. Therefore, institutional



mechanisms to strengthen close coordination of agencies responsible for resolving problems

of cross-border trade locally and nationally should be functional. Financial facilities, for
example, currency exchange and banking services should be in place.

Thailand should render technical assistance in relevant aspects of cross-border trade

to Laos PDR so that simplification of procedures and payments up to international standard
can be enhanced. Both countries may also explore how to bring down trade discrimination or
non-tariff trade barriers particularly from Lao side. Mobilization of financial resources both
from Thailand and prospective third party donors to help develop required infrastructure in
Laos PDR should be continued. Joint border economic zones and cross-border investments
linking Muang district, Nongkhai province connects with Vientiane, a capital city of Laos
PDR and Muang district, Mukdaharn province links with Khanthabouly city, Savannakhet
province of Laos PDR should be materialized. Thailand should additionally keep up granting
trade privileges and market access particularly on agricultural goods to Laos PDR.

The specific measures to support cross-border trade between Thailand and Cambodia are as

Improve facilities and logistics system to facilitate cross-border trade in Aranyaprathet

district, Sakaeo province.

Simplify procedures and regulations of exports in response to the current situation in

order to facilitate and reduce cross-border trade transaction costs.

Improve Value Added Tax refund system and import tax, etc.




Conduct in-depth marketing research for Cambodian market so that Thai exporters
can use as guidelines for exports.

Reduce import tax on raw material and machinery as well as parts to be used for
production for export in compliance with ASEAN Free Trade Area which will help
increase competiveness of Thais products.

Improve transport routes linking Thailand and Cambodia in order to facilitate

transportation services as well as reducing logistics costs to Cambodia.

Provide training on international trade and cross-border trade practices to traders of

both countries.

Closely cooperate between Royal Thai and Cambodian Governments in promoting

good business ethics for both cross-border investors and traders.

Cambodia is under reconstruction process and importing a large amount of goods from
Thailand. As a result, Cambodia has been facing deep cross-border trade deficit with
Thailand. In addition, a conflict along Thai-Cambodian border over the co-management
issues of the Prasat Praviharn partly affected cross-border trade and business environment.

It is for that reason necessary to restore strong interdependence, peace and political
stability particularly along border areas of both countries. It is also essential to minimize
cross-border trade imbalance particularly for Cambodia. This could be made possible through
facilitation of cross-border trade, establishment of joint border economic zone and crossborder investments linking Aranyaprathet district, Sakaeo province with Poipet city, Banteay
Meanchey province of Cambodia. Institutional mechanisms to strengthen close coordination
of agencies responsible for resolving problems of cross-border trade locally and nationally
should be functional.



Financial facilities, for example, currency exchange and banking services should be in
place. Thailand should render technical assistance in relevant aspects of cross-border trade to
Cambodia so that simplification of procedures and payments up to international standard can
be enhanced. Both countries may also explore cooperation on suppression of illegal border
trade. Thailand should maintain granting trade privileges and market access particularly on
agricultural goods to Cambodia.


Foreign Exchange Market


Currency Used by Thailand and Its Currency Conversions.

The baht is the currency of Thailand. It is subdivided into 100 satang. The issuance of
currency is the responsibility of the Bank of Thailand.
The currency was originally known as the tical; this name was used in the English
language text on banknotes until 1925. However, the name baht was established as the Thai
name by the 19th century. Both tical and baht were originally units of weight, and coins were
issued in both silver and gold denominated by their weight in baht and its fractions and
Until November 27, 1902, the tical was fixed on a purely silver basis, with 15 grams
of silver to the baht. This caused the value of the currency to vary relative to currencies on a
gold standard. In 1857, the values of certain foreign silver coins were fixed in law, with the
one baht = 0.6 Straits dollar and five baht = seven Indian rupees. Before 1880 the exchange
rate was fixed at eight baht per pound sterling, falling to 10 to the pound during the 1880s.
In 1902, the government began to increase the value of the baht by following all
increases in the value of silver against gold but not reducing it when the silver price fell.
Beginning at 21.75 baht = one British pound, the currency rose in value until, in 1908, a fixed
peg to the British pound was established of 13 baht = one pound. This was revised to 12 baht
in 1919 and then, after a period of instability, to 11 baht in 1923. During World War II, the
baht was fixed at a value of one Japanese yen.






Figure 3 : the value of Thai baht with respect to US Dollar

Figure 4 : The value of Thai baht with respect to EURO





Main Uses of Foreign Exchange Market for International Businesses in


The foreign exchange market (forex, FX, or currency market) is a global decentralized
market for the trading of currencies. This includes all aspects of buying, selling and
exchanging currencies at current or determined prices. In terms of volume of trading, it is by
far the largest market in the world, followed by the Credit market. The main participants in
this market are the larger international banks. Financial centres around the world function as
anchors of trading between a wide range of multiple types of buyers and sellers around the
clock, with the exception of weekends. The foreign exchange market does not determine the
relative values of different currencies, but sets the current market price of the value of one
currency as demanded against another.

The foreign exchange market works through financial institutions, and it operates on
several levels. Behind the scenes banks turn to a smaller number of financial firms known as
"dealers", who are actively involved in large quantities of foreign exchange trading. Most
foreign exchange dealers are banks, so this behind-the-scenes market is sometimes called the
"interbank market", although a few insurance companies and other kinds of financial firms
are involved. Trades between foreign exchange dealers can be very large, involving hundreds
of millions of dollars. Because of the sovereignty issue when involving two currencies, forex
has little (if any) supervisory entity regulating its actions.

The foreign exchange market is unique because of the following characteristics:

its huge trading volume representing the largest asset class in the world leading to

high liquidity;
its geographical dispersion;
its continuous operation: 24 hours a day except weekends, i.e., trading from 22:00

GMT on Sunday (Sydney) until 22:00 GMT Friday (New York);

the variety of factors that affect exchange rates;
the low margins of relative profit compared with other markets of fixed income; and
the use of leverage to enhance profit and loss margins and with respect to account



There are several uses for Thailand uses the Foreign Exchange Market for International
Businesses such as the foreign exchange market serves four primary functions for
international companies. First, the market is used to convert payments a company receives in
foreign currencies into the currency of its home country. Second, the market is used to
convert the currency of a company's home country into another currency when they must pay
a foreign company for its products and services in their currency. Third, international
businesses may use foreign exchange markets when they have spare cash that they wish to
invest for short terms in money markets (of another country). Fourth, the market is used for
currency speculation.





In conclusion, International business comprises all commercial transactions (private and

governmental, sales, investments, logistics, and transportation) that take place between two or
more regions, countries and nations beyond their political boundaries. Usually, private
companies undertake transactions for profit; governments undertake them for profit and for
political reasons. The term "international business" refers to all those business activities
which involve cross-border transactions of goods, services, resources between two or more

Thailand has actively participated in International Businesses in regional economic

integration especially ASEAN and GMS. Coherent trade policies have therefore been
formulated aiming to foster closer trade and investment relations within ASEAN and GMS
member countries. However, Thailand is absent of explicit bilateral cross-border trade
policies with Myanmar, Laos PDR and Cambodia due to frequent change of government
administration. Greater advancement of physical connectivity and GMS economic corridors
has since recent decade resulted in greater increase of cross-border trade both in terms of
volume and value between Thailand and Myanmar, Laos PDR and Cambodia. Nevertheless,
there is existent of rather similar bilateral cross-border trade problems. The cross-border trade
growth is believed to substantially contribute to national development.

However, it is questionable how much the greater flows of cross-border trade

contribute to local and regional development as border points normally act as both collection
and distribution functions. Border economic zones could perhaps help spread out the growth
of cross-border trade toward local and regional development in Thailand as well as possible
sharing of benefits with counterpart border cities in Myanmar, Laos PDR and Cambodia. In
addition, Thailand should provide various technical assistance and institutional capacity
building programs relevant to cross-border trade (aid for trade) to these neighbouring
countries in order to fairly help minimize trade gaps. And measures to lower non-tariff trade
barriers imposed by these neighbouring countries on Thai products should be discussed and
brought down.





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Henry A. (2016). Thailand History. Sonit Education Academy

Erik O. et al. (1996). Thailand: The Road to Sustained Growth. INTERNATIONAL

Journals :

Asian Development Research Forum Secretariat. (2005). Regional Production

Networks and Implications for Trade and Investment Policies and Regional

Cooperation in East Asia, the Thailand Research Fund, Bangkok.

Royal Thai Government. (2009). Royal Thai Government Administration Plan for the

Year 2009-2011, retrieved from, on 17 March 2009.

WTO Trade Policy Review 2003
Thailand-U.S.: freer trade weakers access to HIV/AIDS drugs. IPS-Inter Press

Service, 21 May 2004.

WTO Draft Guidelines for Freer Global Farm Trade Fails to Meet Thai Demands.

Bangkok Pos, 20 Feb 2003.

Fed: Australia has WTO hopes for sugar, AAP NEWSFEED, 5 May 2004.
Thailand-U.S.: freer trade weakers access to HIV/AIDS drugs. IPS-Inter Press

Service, 21 May 2004.

Textile trade put on alert, The Nation, 22 May 2004.
WTO Chief's Warning: Bilateral deals 'a threat'. The Nation, 20 Feb 2003.

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