Market accessAPECExport controlsNZ and the WTOOECDTrade AgreementsTrade RelationshipsTrade and economic analysisTrade lawTrade scholarships
Find MFAT's information paper on a country or territory. (We don't have information papers on all countries.)
Although we have tried to use plain English content on the site, you may come across specialist terms and acronyms. Find out what they mean in our glossary of terms.
If you come across a term that isn't included in the Glossary please send us an email.
Especially in light of the complementary nature of the Thai and New Zealand economies, there is extensive scope for businesses to work together in mutually beneficial ways which go beyond the seller-buyer relationship. A CEP which liberalises and facilitates trade in goods and services will increase and highlight the opportunities available for Thai and New Zealand business people to collaborate to mutual advantage through the transfer of technology and skills, sharing of ideas and improvements in business practice.
The previous chapter looked at ways in which the governments of Thailand and New Zealand can cooperate and coordinate activities in support of the economic relationship. This chapter provides examples of existing business relationships which are benefiting both countries. In many cases, the companies concerned consider that the opportunities to expand these relationships could be improved following a CEP.
D M Palmer New Zealand Ltd began working with Thai company Sakolchai Transpack in the mid-1990s. Together, the two companies market industrial grade pine timber for use in packaging. The packaging is used for exports from Thailand of car parts and a range of other manufactured goods.
D M Palmer packaging provides essential support for major Thai export industries including the automotive and manufacturing industries and therefore contributes to significant employment for Thai people.
While initial processing occurs in New Zealand, Sakolchai Transpack carries out further processing at its factory in Laem Chabang to meet specialised customer needs. In recent years, Sakolchai Transpack has expanded production significantly to meet demand for D M Palmer products. A new factory was built in Thailand specifically to meet this demand.
Mastip Technology is a New Zealand-based manufacturer of “hot runner” systems for manufacturing plastic goods. These systems keep plastic molten throughout the manufacturing process, which reduces waste and increases efficiency. Mastip exports to more than 30 countries and began exporting to Thailand 10 years ago, through its Thai distributor Mastip Thailand Co Ltd, which sells to a wide range of industries including automotive, computer, packaging and telecommunications.
Mastip’s technology brings significant benefits to Thai industries by increasing production speed and efficiency, reducing the number of rejects and the amount of waste, and helping improve product quality. This saves costs and improves the global competitiveness of Mastip’s Thai clients. Mastip pioneered “hot runner” technology in Thailand and has provided seminars and worked with technical institutes to educate Thai engineers on its use.
Carter Holt Harvey (CHH) began operating in Thailand in the mid-1990s, exporting prefabricated timber frame construction systems. Over time, the company has expanded its range to include outdoor timber products and structures such as pergolas. CHH has a factory in Bang Pa-In near Ayudhaya. The company employs about 12 people directly. A further 60 contractors work exclusively for CHH. Sales have grown fourfold in the past seven years.
CHH’s products use sustainable, plantation-based timbers. This leaves native hardwood timbers available for conservation or use in added-value industries such as furniture manufacturing. CHH has introduced new technology to Thailand and trained Thai engineers in new skills. Apart from the chief executive, all employees and contractors are Thai. CHH is researching the feasibility of using Thailand as a base for exporting to other countries in Asia, which could lead to further growth in employment.
Since it was established in 1981 Baldwin Boyle Group has grown to become the largest independently owned public relations consultancy specialising in the Asia-Pacific region.
Baldwin Boyle Group set up a company in Thailand in 2002. However prior to this it provided advisory services out of its Singapore office. It currently employs ten people in Thailand, and works as an in-house consultant for Thai companies working in areas such as change management, financial PR, brand building, website development and customer communications.
Baldwin Boyle Group is possibly unique in Thailand in its emphasis on communications strategy. Until recently public relations has been rather reactive and focused mainly on media, advertising and event management. However corporate clients are increasingly recognising the role that communications can play in implementing management strategies.
Skill transfer is a very important part of Baldwin Boyle Group’s role in Thailand. In addition to training its own Thai employees it is actively training staff employed by its clients.
Since Baldwin Boyle Group was successful in setting up a company it has not faced barriers to its operations, although the administrative side of operating a business can be arduous – including the “90 day checks” required of all expatriates living in Thailand.
Pacific Wide (New Zealand) Ltd has been exporting sphagnum moss to Thailand for eleven years and has recently introduced bark. Both these products are important fertilisers for Thailand’s lucrative orchid production and exporting industry.
There is no Thai production competing with Pacific Wide but tariffs of up to 60% are currently restricting exports to Thailand. Removing the tariffs on sphagnum moss and bark imports into Thailand through the CEP will significantly lower production costs for the Thai orchid industry, improving their export competitiveness and increasing earnings.
Intermech Limited is a New Zealand based manufacturing, technology and development company and is a world leader in CNG compression technology. They employ sixty-five people and 100% of their products are exported. Intermech produces compressed natural gas (CNG) refuelling station equipment and has been increasing its exports by 30-40% each year. Intermech is active throughout much of the world (South East Asia, China, Latin America and the Middle East) and began exporting into the Thai market in 2002. Intermech’s sales to Thailand in 2003 comprised a total of 20 CNG refuelling stations.
As CNG is a clean fuel, CNG refuelling equipment supplied by Intermech is assisting Thailand to reduce its dependence on oil for fuelling transportation services and reduce air pollution. Aside from the environmental benefits, use of CNG would allow Thailand to cut down on oil imports and processing, bringing savings to the wider economy.
Intermech exports to Thailand currently attract import duties of up to 20%. Removing this tariff would make Intermech’s products more affordable to Thai customers, facilitate technology transfer and help make alternative energy more commercially viable in Thailand.
A comprehensive, trade facilitating bilateral closer economic partnership between Thailand and New Zealand will provide real benefits for the people, businesses and economies of both nations.
This study has identified specific ways in which a bilateral CEP could contribute to the wider trade policy and economic objectives of Thailand and New Zealand. Both countries are already leaders in regional economic reform and trade liberalisation, working cooperatively in the Cairns Group at the WTO and as members of APEC. A quality CEP negotiated between Thailand and New Zealand has the potential to set a high standard for preferential trade agreements in the region while at the same time helping to advance the APEC and WTO trade liberalisation processes.
As natural trading partners the aim of a CEP should be to ensure that the greatest possible benefits from bilateral trade accrue to both parties. To achieve this a CEP should include the comprehensive elimination of tariff and other barriers that currently restrict bilateral trade.
Thailand and New Zealand’s complementary trade structures mean that there is large potential for trade creation following a CEP. Exporters in both countries will directly benefit from the removal of tariffs and reduction of other trade barriers allowing greater quantities and a larger variety of goods and services to be exchanged. Equally consumers in Thailand and New Zealand could benefit from increased competition, lower prices and access to a greater selection of goods and services. Thailand’s growing food processing sector would be expected to gain from lower prices when importing quality raw ingredients from New Zealand. In the other direction, New Zealand businesses and consumers stand to benefit from imports of manufactured goods and processed products from Thailand. In services, Thailand and New Zealand have developed different areas of expertise and the sharing of these skills following a CEP could benefit many sectors of society.
As with any preferential trade agreement, it is important that benefits from a CEP only accrue to Thai and New Zealand goods. The rules of origin should be trade facilitating and take into account the relevant domestic production processes in both countries. They should also be readily enforceable.
In general the economic structures of Thailand and New Zealand are complementary. There are however areas where there is competing production which is covered by tariff barriers. Given the size of trade between Thailand and New Zealand and the production capacity in each country, a bilateral CEP is, in isolation, not expected to impact significantly on current industry trends.
The governments of Thailand and New Zealand actively encourage the inflow of overseas investment. A CEP can create a more stable and transparent platform for foreign investment while raising the profile of the two investment markets both bilaterally and internationally.
Economic partnership agreements between two countries can stimulate mutually beneficial cooperation at many levels. This study examined a number of industries where existing trade and investment relationships are producing significant spin-offs and where a CEP could introduce new opportunities. Greater economic interaction under a CEP should in turn lead to exchanges of technology, capital, innovation and knowledge which are all valuable assets for both countries to operate more competitively in the global market place.
Businesses in Thailand and New Zealand can also benefit from improved cooperation between the two governments. A bilateral CEP could include provisions for government-to-government cooperation and facilitate understanding of regulations including in the areas of sanitary and phytosanitary measures, customs procedures, technical barriers to trade, e-commerce and paperless trading, intellectual property and labour and environmental practices. Such collaboration would lower transaction costs for doing business in the partner market and facilitate trade and other economic transactions between Thailand and New Zealand.
Improving transparency of government procurement and removing barriers to trade could provide new opportunities for suppliers of goods and services and allow more cost efficient purchasing for the government agencies of Thailand and New Zealand.
Thailand and New Zealand have a long and warm bilateral relationship across the spectrum of society, the economy and culture. This relationship has steadily developed over the years and a CEP agreement would cement this excellent association into the future.
