FTA to push Thailand as bicycle supplier

The announced reopening of the negotiations for a free trade agreement (FTA) between the European Union and Thailand aims to advance swiftly and a first round of discussions will be held in the coming months. The FTA could result in another push for the already growing bicycle production in South-East Asia.

“The announcement to reopen the FTA discussions confirms the key importance of the Indo-Pacific region for the EU trade agenda, paving the way for deeper trade ties with the second largest economy in South-East Asia and further strengthening the EU’s strategic engagement with this burgeoning region,” said the European Commission in statement. Thailand is already the sixth largest exporter of e-bikes to the EU with 24,641 units in 2022, up 2.89% from 2021.

Biggest bicycle export growth

Thailand also saw the biggest boost in bicycle exports to the European Union in 2022. The export volume increased from 127,751 units in 2021 to 214,699 bicycles, a growth of 68%. No other country reported such an increase in bicycle exports. In 2022 Thailand moved up from position 12 to 10 in the ranking of Europe’s leading bicycle supplying countries. Thailand’s main customers are based in Germany.

Well-established trade relations

Besides bicycles and e-bikes, the EU and Thailand already have well-established trade relations. According to the Commission’s data, trade in goods between the two countries was worth over €42 billion in 2022, while trade in services was worth over €8 billion in 2020. The EU is Thailand’s fourth largest trade partner after China, Japan and the US, accounting for 7.5% of the country’s total trade. In 2020, Thailand exported goods worth €15.1 billion to the EU; and the EU exported goods worth €11.3 billion to Thailand.

Sustainability Impact Assessment

The EU will commission a Sustainability Impact Assessment in support of the negotiations, to carry out an analysis of the possible economic, environmental, human rights and social impacts of the agreement, and to provide recommendations on how to maximise the expected positive effects, whilst minimising potential negative ones.

Earlier negotiations stopped

The EU and Thailand first launched negotiations for a free trade agreement in 2013, until 2014 when they were put on hold, following the military takeover in the country. Later, in light of Thailand’s advances in the democratisation process, the Council adopted Conclusions and called on the Commission to explore the possibility for resuming talks with Thailand and stressed the importance of taking steps in that direction.