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Trade Recovery and Export Growth: Ministry of Commerce Pushes Border and Transit Trade Plans

January, 8 2024

Mr. Ronnarong Poolpipat, Director-General of the Department of Foreign Trade, reported that Thailand recorded a trade surplus of 389 million baht in border trade with Malaysia, Laos, Cambodia, and Myanmar, which totaled 74.8 billion baht in value. Key border export products included diesel (3.28 billion baht), refined oil (1.42 billion baht), and computers and accessories (1.30 billion baht).

Meanwhile, transit trade to China, Singapore, Vietnam, and other third countries amounted to 64.92 billion baht, a 6.6% increase from the previous year. Key transit export products included hard disk drives (3.21 billion baht), block rubber (TSNR) (2.88 billion baht), and fresh durians (2.21 billion baht).

Challenges and Opportunities in Border Trade

Despite growth in transit trade, border trade contracted due to economic instability in neighboring countries. Laos continues to struggle with high inflation and currency depreciation, while the conflict in Myanmar has affected Thai exports, which rely heavily (80%) on border trade.

However, Thai exports to China through transit trade expanded for the fifth consecutive month, driven by:

• Fresh durians (2.21 billion baht, +162.8%)
• Processed wood (1.99 billion baht, +131.7%)
• Block rubber (TSNR) (1.48 billion baht, +48.7%)

To boost border trade, the Ministry of Commerce has launched the Border and Transit Trade Promotion Strategy (2024-2030), with a goal to increase annual trade volume to 2 trillion baht by 2030.

Four Key Strategies for Border and Transit Trade Growth:

1. Enhancing Thailand’s competitiveness to increase trade value.
2. Upgrading border facilities and streamlining customs processes.
3. Leveraging regional trade agreements and cooperation frameworks.
4. Encouraging investment in border areas and neighboring countries.

Planned Actions for Border Trade Development

• Upgrading three border checkpoints to permanent crossings:

  1. Singkhon Border Checkpoint (Prachuap Khiri Khan)
  2. Ban Huai Ton Nun Checkpoint (Mae Hong Son) – Thailand is negotiating with Myanmar to finalize the Joint Detail Survey (JDS) for boundary verification.
  3. Ban Sub Taree Checkpoint (Chanthaburi)

• Reducing customs clearance delays at the Mae Sot Border Checkpoint 2 (Tak) by constructing an external X-ray facility to speed up inspections.

• Accelerating digitalization of Certificates of Origin (C/O) for border trade with Cambodia, Vietnam, Indonesia, Laos, and Myanmar, with ongoing work to resolve issues with the Philippines.

• Establishing One-Stop Service (OSS) centers in 10 high-value border trade provinces:

  • Immediate implementation: Chiang Rai, Tak, Trat, Songkhla
  • Within 3 months: Nong Khai, Udon Thani, Nakhon Phanom, Mukdahan
  • By 2025: Chanthaburi and Sa Kaeo

Currently, Thailand has opened 86 out of 95 border trade checkpoints, while neighboring countries have 73 open checkpoints.

Government and Private Sector Collaboration

Mr. Phumtham Wechayachai, Deputy Prime Minister and Minister of Commerce, emphasized that the private sector should lead economic growth, while the government plays a supporting role in regulatory improvements. The border and transit trade strategy is crucial for reviving trade activity, boosting Thai exports, and stimulating regional economic development.