Thailand and Bhutan Announce Major New Trade Agreement
Thailand and Bhutan are poised to sign a landmark free trade agreement (FTA) in early April, significantly strengthening economic ties. Following nine months of intensive negotiations, culminating in the fourth and final round in Bangkok (February 17–19), Commerce Minister Pichai Naripthaphan announced the successful conclusion. The agreement is slated for official signing during the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Leaders' Summit, hosted by Thailand (April 2–4). This will be Thailand’s 17th FTA and the second secured under Minister Pichai’s leadership.
The agreement promises substantial bilateral trade growth and broader economic cooperation. Central to the FTA is high-level market access encompassing nearly all trade between the two countries. Bhutan shows keen interest in importing diverse Thai goods, including vehicles, agricultural products (processed foods such as dried fruits and instant noodles), textiles, chemicals, and electrical appliances, opening new avenues for Thai businesses.
Beyond goods, the FTA will bolster collaboration in tourism, agriculture, education, vocational training, and renewable energy. This multifaceted approach reflects both nations' commitment to a comprehensive and mutually beneficial partnership. While acknowledging Bhutan’s smaller market size compared to some of Thailand’s other partners, Mr. Pichai highlighted its considerable long-term potential, citing Bhutanese consumers' strong preference for Thai products.
In 2024, bilateral trade reached 460 million baht (approximately US$13.5 million), with Thailand holding a substantial surplus. Thai exports totaled 457 million baht, while imports from Bhutan reached 3.47 million baht. Key Thai exports included vehicles, ready-made meals, electrical appliances, and processed fruits. Bhutan primarily exported vegetables, fruits, timber products, and beverages (mineral water and soft drinks).
To ensure a smooth transition and incorporate stakeholder input, the Department of Trade Negotiations will hold consultations in March. Feedback will be presented to the Cabinet for final approval before the official signing. This consultative process underscores the Thai government’s commitment to transparency and inclusivity in trade policy.
This FTA represents more than an exchange of goods; it symbolizes a deepening partnership, paving the way for enhanced cooperation and shared prosperity. The agreement offers a valuable opportunity for both nations to leverage their strengths and build a more robust and interconnected economic future.
