BANGKOK, NNA - Thailand is expecting an indirect favorable impact on its exports from U.S. President Donald Trump's trade policy, including the withdrawal from the Trans-Pacific Partnership free trade scheme.
The Trade Policy and Strategy Office under the Ministry of Commerce anticipates Thai exports will grow 2.5 to 3.5 percent this year, faster than last year's 0.45 percent gain, despite the Trump administration's protectionist trade policy.
Pimchanok Vonkorpon, director general of the office, said the Thai economy would not be directly affected by Trump's policy when compared with its impact on major U.S. trading partners such as China and Mexico because the U.S. trade deficit with Thailand is not massive.
The United States may move to slap higher duties on some imports from such countries to reduce trade deficits and, therefore, Thailand may have an opportunity to export more to the United States and Canada in place of those countries. Among Thai export products expected to benefit are auto parts, televisions, bicycles, motorcycles, ovens, furniture and apparel.
Pimchanok said Trump's call for domestic investment promotion, which is mainly set to draw investors back to the United States, may cause the postponement of new investment or expansion in Thailand among American firms manufacturing intermediate products for global supply chains in the North American market, while investment in production for supply to the Asian market will probably not be affected.
The U.S. withdrawal from the TTP pact is also advantageous for Thailand, which is not involved in the trade accord, as exports from Malaysia and Vietnam, both TTP participants and competitors in the U.S. market, will not be able to enjoy expected greater advantages over Thai exports as the multilateral free trade scheme remains stalled.
Somkiat Tangkitvanich, president of the Thailand Development Research Institute, said the country is less exposed to U.S. protectionism than other Asian countries because direct exports from Thailand to the U.S. account for only 1 percent of the total, leaving a mere $12 billion bilateral trade surplus in Thailand's favor.
But Thailand ought to be cautious and careful as up to 70 percent of the country's economy relies on exports, Somkiat said.
"World financial markets are expected to become very erratic this year due to any news regarding Trump's policies which influence currency appreciation and depreciation," he said.
In the event China is affected by possible new U.S. trade barriers, Thailand would gain opportunities to replace Chinese exports, but many Chinese firms would try to relocate their U.S. exports to Asian countries, including Thailand, Somkiat said, adding that Thai firms supplying electronic components and some other parts to China would also be affected at the same time if Chinese output intended for the U.S. market declines. (NNA/Kyodo)