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Thailand is an open economy that has long followed economic reforms based on the idea of a market economy. In terms of trade policy, liberal and transparent polices have contributed to Thailand’s past impressive economic growth and strong recovery after the 1997 financial crisis. With preferential trade agreements now being widely used to pursue trade liberalization to supplement the WTO process, Thailand has adjusted to this trend. In addition to actively participating in the WTO, Thailand has embarked on FTA negotiations at both the regional and bilateral level with the ASEAN countries, China, India, Australia, and Bahrain. In the near future, Thailand also plans to begin negotiations with the US, Japan, and Peru as well as New Zealand.
As a result of its economic and trade policies, Thailand is one of the most trade-oriented nations. In 2003, the value of Thailand’s trade was approximately 110% of GDP. International trade accounts for a significant portion of Thailand’s economy, with goods and services exports amounting to approximately 65% of GDP. In 2003, Thailand’s total merchandise trade was US$141.2 billion. Exports were valued at US$75.9 billion and imports at US$65.3 billion, providing a trade surplus of US$ 10.6 billion. Thailand was ranked as the 23rd most significant exporter with a 1.19% share of world exports and the 22nd importer with a 1.1% share of total world imports.
Thailand’s major trading partners and products in 2003 are indicated in Table 5.1.
Exports in 2003 were worth US$75 billion, a rise of 9% on 2002. The main export destinations were Japan, the United States and China. Despite slow growth in some of these markets, Thailand was less affected than before as the growth of intra-regional trade helped shore up demand for exports. Export sectors which expanded in this period included hi-tech industrial products, automatic data processing machines and parts, electronic integrated circuits, and agricultural goods and processed seafood. Of Thailand’s total exports, 76.48% are manufactured products and 18.4% are agricultural and agro-industry products.
On the import side, capital goods represented 44.8% of total imports, consumption goods 8.3%, and mineral and fuel products 11.8% (Figure 5.1). The main import sources were Japan, the United States, and China. Import categories which experienced significant growth were consumer goods, capital goods, raw materials and semi-raw materials.
Figure 5.1: Thailand’s Trade structure
Table 5.1: Thailand’s Major Trading Partners and Key Products
| Major Exports | US$millions | Export Destinations | %of Total | |
| Total | 75,900 | |||
| Computer and parts | 8,192 | United States | 18 | |
| Electronic integrated circuits | 4,626 | Japan | 15 | |
| Motor cars and parts | 3,975 | Singapore | 7 | |
| Rubber | 2,788 | Hong Kong | 5 | |
| Precious stone and jewellery | 2,514 | China | 5 | |
| Major Imports | US$millions | Import Sources | %of Total | |
| Total | 65,300 | |||
| Electrical machinery and parts | 7,988 | Japan | 28 | |
| Machines for industrial use | 7,834 | United States | 11 | |
| Crude oil | 7,113 | China | 9 | |
| Chemicals | 6,196 | Malaysia | 7 | |
| Electronic integrated circuits | 4,213 | Singapore | 5 | |
Thailand is the world’s 26th largest services exporter and 24th largest services importer in the world. Thailand is a growing net service exporter with exports equivalent to 18% of total Thai exports. International tourism and transport are the two key exported services accounting for around three quarters of the total. On the import side, international tourism, royalties and licence fees, and transport services make up about 60 percent of imported services.
Figure 5.2 portrays Thailand as a growing net service exporter. The value of services exported in 2002 was approximately US$15 billion. Major export services include tourism (54.3%), passenger transport (17.7%), freight transport (4.7%), and construction services (2.3%). The currency devaluation and a large number of active tourism promotion schemes since 1997 have resulted in high growth in the export of tourism services. The value of services imported in 2002 was US$10.7 billion. Major imported services were other services (43.1%), tourism (34.3%), royalties and licence fees (9.6%), freight transport (8.2%), and passenger transport (4.8%).
Figure 5.2: Thailand’s International Trade in Services in 1994 – 2004
New Zealand is a small export oriented economy trading in a broad range of goods and services. It relies heavily on trade with the international community to maintain and improve the standard of living for its citizens.
New Zealand’s share of overall world merchandise trade is small, just 0.22% of world exports and 0.23% of world imports[1]. While a small player overall, there are several important areas where New Zealand is a key player. Dairy produce and meat are two examples. New Zealand is developing a reputation for supplying specialist products and services in a number of smaller niche markets with a particular focus on fostering innovation and harnessing new technologies.
Recognising the importance of trade (total exports of goods and services are equivalent to 44% of GDP) and the barriers facing these exports, New Zealand’s trade policy has focused on obtaining better access to overseas markets. This is undertaken primarily through multilateral negotiations in the WTO, as well as through complementary regional initiatives such as APEC and bilateral trade agreements such as the 1983 Closer Economic Relations (CER) agreement with Australia and the 2001 CEP with Singapore. New Zealand sees CEPs as an opportunity to deepen economic integration with trading partners across the wider trade and investment relationship and to promote mutually beneficial collaboration to enhance both parties’ global competitiveness. In addition to the planned negotiations with Thailand, New Zealand is engaged in CEP initiatives at various stages with Chile and Singapore (Pacific Three CEP), Hong Kong and China. New Zealand also provides tariff preferences to imports from Pacific Island countries and least developed countries.
New Zealand’s merchandise exports totalled US$16.5 billion in 2003, split equally between agricultural and non-agricultural goods. Despite sluggish world demand, New Zealand exports have recorded annual average growth of over 7% since 2000. An appreciation of the New Zealand dollar in 2003 dampened the external sector’s performance but export values remain well above 1999 levels.
In 2003 agricultural products accounted for 52% of total merchandise exports[2] (Figure 5.3). This compares with an OECD average of just 6.8%[3]. Most of New Zealand’s agricultural and resource exports face barriers in global markets. These obstacles include prohibitive tariffs, import quotas, subsidised domestic production and other non-tariff measures. The problem of “tariff escalation” whereby tariffs increase as value is added to the primary resource also affects New Zealand’s value-added exports.
Figure 5.3: Composition of New Zealand’s Exports
Source: World Trade Atlas
Dairy products and meat, the two largest export earners for New Zealand (Table 5.3), are areas where New Zealand has a comparative advantage in production due to favourable natural resources and conditions. New Zealand’s natural resources of forest products and seafood are harvested in a sustainable manner and contribute strongly to the country’s export profile. Production from New Zealand’s manufacturing sector is increasingly destined for international markets particularly in niche areas such as whiteware (e.g. dishwashers and refrigerators), electrical components, and telecommunications equipment. Recent growth in New Zealand’s manufactured exports has centred on innovative and high-tech products.
Table 5.3: New Zealand’s Major Merchandise Exports and Principal Markets
| Major Exports | US$millions | Export Destinations | % of Total | |
| Total | 16,487 | |||
| Dairy | 2,780 | Australia | 22 | |
| Meat | 2,409 | EU | 16 | |
| Wool | 1,212 | United States | 15 | |
| Machinery | 816 | Japan | 11 | |
| Seafood | 620 | China | 5 |
New Zealand’s export destination profile is diverse, spanning the globe. Australia is New Zealand’s single largest export market, followed by the EU, the US, Japan and China. Since 1991 the economies of ASEAN have also become an increasingly important destination for New Zealand exporters.
Imports in 2003 totalled US$18.6 billion, a significant increase of 22% on 2002 levels. The primary drivers were favourable currency conditions and solid domestic economic performance feeding into strong consumer demand. Figure 5.4 and Table 5.4 show that manufactured products, particularly electrical machinery, motor vehicles and textiles, clothing and footwear, are key imports for New Zealand.
Table 5.4: New Zealand’s Major Merchandise Imports and Principal Sources
| Major Impors | US$millions | Import Sources | % of Total | |
| Total | 17,422 | |||
| Motor Vehicles | 2,742 | Australia | 24 | |
| Mechanical Machinery | 2,390 | EU | 21 | |
| Electrical Machinery | 1,597 | United States | 13 | |
| Mineral Fuels | 1,578 | Japan | 12 | |
| Plastics | 646 | China | 10 |
Figure 5.4: Composition of New Zealand’s Imports
Source: World Trade Atlas
Since 1994 growth in total services trade has outpaced increases in merchandise trade flows. Trade in services has also delivered surpluses to New Zealand over the past two years. New Zealand services exports are now worth around a quarter of total New Zealand exports. Tourism and education are the two big ticket services items and rank in the top five foreign exchange earners for New Zealand. Tourism and international education, along with transport, are the commonly identified services exports but New Zealand companies are also actively providing more specialised professional, consultancy and communication services to clients around the world.
In the year to September 2003 exports were valued at US$6 billion, primarily comprising tourism and international education earnings but other significant service exports include transportation and other business services (including legal services, accounting, management consultancy, public relations, architectural and engineering services).
Imports of services in the September 2003 year were worth US$5.4 billion, largely made up of travel, tourism and ‘other’ business services.
Figure 5.5: New Zealand’s International Trade in Services in 1994 - 2002
Source: Statistics New Zealand
[1] UNCTAD Statistics
[2] Note: the World Trade Organisation defines seafood and forestry as non-agricultural products.
[3] OECD In Figures (2003 Edition): 2001 Year.
