Thailand market snapshot
- GDP: US$387.2 billion (2013)
- GDP per capita: US$5,674 (2013)
- GDP growth: 2.9 per cent (2013)
- Population: 68.2 million (2013)
- Trade with Australia: AU$19.4 billion (2012-13)
The Thailand-Australia Free Trade Agreement (TAFTA) has eliminated the majority of Thai tariffs on goods imported from Australia. The reduction of Thailand's previously high tariff barriers (for some goods, up to 200 per cent) is a significant win for Australian businesses, opening up a range of export opportunities in Southeast Asia's second-largest economy. TAFTA also improves the environment for bilateral services trade and investment.
The agreement entered into force on 1 January 2005 and was Australia’s third free trade agreement. It was Thailand’s first comprehensive free trade agreement and its first with a developed country. Total two-way trade between Australia and Thailand has more than doubled since TAFTA entered into force.
Key interests and benefits
- The elimination of 94 per cent of Thailand’s tariff and quota barriers on imports from Australia as of 2010, with the remaining tariffs phasing to zero in 2015 or 2020 (with the exception of skim milk powder and liquid milk and cream, for which the tariff rate quotas will be eliminated in 2025).
- More open access for Australian companies to Thailand’s services market and a commitment to liberalise two-way services trade in future.
- Increased access for Australian investors in Thailand, permitting majority Australian ownership for businesses in certain sectors including mining operations, construction services, restaurants and hotels, tertiary education institutions, maritime cargo services and more.
- Provisions on investment protection that guarantee a range of rights to Australian direct investors in Thailand, including the right to transfer their funds out of Thailand at any time, and the right to seek impartial resolution of any disputes with the Thai government over their investments.
- Facilitates business by easing visa and other requirements for the temporary entry of Australian business people to Thailand, including through reduced paperwork, access to a one-stop visa and work permit service, and extension of the maximum length of stay under business visa arrangements.
Key outcomes of the Thailand-Australia Free Trade Agreement
Thailand's tariff commitments [ZIP (compressed) 517 KB]
Thailand hosted the third TAFTA Joint Commission meeting on 21 June 2012 in Bangkok. The Joint Commission meeting resulted in progress towards the two reviews mandated under TAFTA – a general review and a review of its provisions on special agricultural safeguards – and improved implementation procedures.
The reviews were progressed by officials in 2013 with meetings of the TAFTA Expert Group on Sanitary and Phytosanitary Measures and Food Standards (15-16 July) and Market Access Implementing Committee (26 July).
The Experts Group meeting provided a platform for Thailand and Australia to discuss their respective market access priorities. Australia presented information to support more favourable import protocols for fresh fruit exports to Thailand. As a result, officials from Thailand’s Department of Agriculture agreed to participate in a workshop in Brisbane on technical biosecurity protocols relevant to Australia’s horticulture exports.
One outcome of the Market Access Implementing Committee meeting was an agreement to move towards the use of electronic signatures and seals on TAFTA certificates of origin (COOs) from 1 September 2013. The new procedures for using electronic signatures and seals make the COO process easier for Australian exporters and authorised bodies as they can create and complete COOs electronically, as well as email them to their importing counterparts in Thailand to be made available to Thai Customs.
TAFTA and Changes to the Tariff Classification System (HS2012)
In 2012, changes were be made to Australia’s tariff structure to reflect the latest five yearly amendments to an International Convention for classifying goods for trade purposes — known as HS2012.
The HS2012 changes impact on tariff classifications, Australian Harmonised Export Commodity Classifications (AHECC) and Rules of Origin.
HS2012 changes will not affect the tariff rates under the TAFTA.
Advice for importers and exporters arising from HS2012 can be obtained from the Australian Customs and Border Protection Service [DOC]
Here you can locate the full text of the Thailand-Australia Free Trade Agreement and other associated official documents.
A practical guide for Australian exporters on how to benefit from the provisions of TAFTA
Certificates of Origin
Reduced or zero tariffs are only available for goods that originate from Australia or Thailand. If products satisfy the relevant 'rule(s) of origin', businesses should obtain a Certificate of Origin to ensure that products receive the TAFTA preferential tariff rates. The Australian Industry Group (AI Group) and the Australian Chamber of Commerce and Industry (ACCI) and affiliated bodies are authorised to certify origin for TAFTA ('Authorised Bodies'). Certificates of Origin can be obtained from either AI Group or from your State or Territory Chamber of Commerce and Industry.
Doing business in Thailand
The Australian Trade Commission’s (Austrade) TAFTA website has further information about the agreement.