Federation of Thai Industries’ Strategic Response to US Tariff Adjustments and Commitment to Sustainable Development Goals

Report Summary

The Federation of Thai Industries (FTI) has outlined a strategic framework to address new US tariff rates and ensure the continued competitiveness of Thai exports. This report details the FTI’s three-pronged approach, which is fundamentally aligned with advancing the United Nations Sustainable Development Goals (SDGs), particularly those concerning economic growth, industry, innovation, and global partnerships.

Despite tariff adjustments, the United States remains a vital export market for key Thai industrial sectors. These include:

• Processed foods and agricultural goods
• Automotive parts
• Electrical appliances and electronic devices
• Textiles and gems
• Steel and aluminium

Strategic Approaches for Sustainable Industrial Growth

The FTI’s proactive strategy is structured around three core pillars designed to foster resilience, innovation, and sustainable economic expansion.

1. Policy Collaboration and Partnership

   This approach focuses on creating a supportive ecosystem for Thai businesses through strategic government engagement.

   • Facilitating Domestic Policy: Collaborating on domestic tax measures to alleviate financial pressures on exporters.
   • Ensuring Access to Capital: Supporting businesses in accessing working capital to manage increased export costs, thereby upholding **SDG 8 (Decent Work and Economic Growth)** by protecting jobs and ensuring business continuity.
   • Expanding Trade Negotiations: Advocating for additional trade agreements to maintain and expand tariff benefits, reflecting a commitment to **SDG 17 (Partnerships for the Goals)**.

2. Enhancing Industrial Innovation and Efficiency

   This initiative aims to bolster the intrinsic capabilities of Thai enterprises through technological advancement and process improvement.

   • Promoting Innovation: Providing businesses with access to knowledge, innovation, and advanced technology to modernize production.
   • Increasing Efficiency: Developing and improving production processes to reduce costs and increase output, which directly contributes to **SDG 12 (Responsible Consumption and Production)** by optimizing resource use.
   • Fostering Value Addition: Encouraging the creation of higher value-added products to enhance competitiveness, a key target of **SDG 9 (Industry, Innovation, and Infrastructure)**.

3. Market Diversification and Economic Sustainability

   This pillar is centered on reducing economic dependency and building long-term stability through new international relationships.

   • Forging New Trade Networks: Actively establishing trade partnerships in new and emerging markets to diversify risk.
   • Achieving Long-Term Sustainability: Expanding trade relationships beyond traditional markets to foster enduring economic sustainability, a foundational principle that supports both **SDG 8** and **SDG 17**.

Conclusion and Outlook

The FTI is committed to closely monitoring the international trade environment and working collaboratively with all industrial groups. The Federation expresses confidence that this strategic framework will reinforce investor confidence, drive economic growth, and secure the Thai industrial sector’s strong and sustainable position within the global market, fully aligned with national and global development objectives.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses economic strategies and industrial support in Thailand, directly connecting to several Sustainable Development Goals (SDGs) focused on economic growth, industrial development, and global trade partnerships.

• SDG 8: Decent Work and Economic Growth

  This goal is central to the article, which focuses on maintaining the strength of Thailand’s industrial sector, ensuring economic growth, and generating revenue despite external trade pressures like new tariffs. The strategies aim to sustain the economic viability of key industries such as processed foods, automotive parts, and electronics, which are significant sources of employment and economic activity.

• SDG 9: Industry, Innovation and Infrastructure

  The article explicitly addresses this SDG through the Federation of Thai Industries’ (FTI) plan to enhance industrial capabilities. The focus on “providing knowledge, innovation, and advanced technology to businesses,” improving “production processes,” reducing costs, and fostering “higher value-added products” directly aligns with the goal of building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation.

• SDG 17: Partnerships for the Goals

  This goal is highlighted through the FTI’s collaborative approach. The article mentions “collaborating with the Government on Policy Measures,” working “collaboratively with all industrial groups,” and “forging trade partnerships in new markets.” These actions exemplify the multi-stakeholder partnerships needed to achieve sustainable development, particularly in navigating the global trade environment and ensuring economic stability.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the FTI’s stated approaches, several specific SDG targets can be identified:

1. Under SDG 8: Decent Work and Economic Growth

   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation.
     
     Justification: The FTI’s plan to enhance entrepreneurial potential by “providing knowledge, innovation, and advanced technology to businesses to develop and improve production processes, reduce costs, increase production efficiency, and foster higher value-added products” directly supports this target. The strategy to expand into new markets also contributes to diversification.

2. Under SDG 9: Industry, Innovation and Infrastructure

   • Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product.
     
     Justification: The entire article is centered on the FTI’s efforts to ensure the Thai “industrial sector will continue to stand strong in the global market,” which is fundamental to maintaining and raising the industry’s contribution to the national economy.
   • Target 9.3: Increase the access of small-scale industrial and other enterprises… to financial services, including affordable credit.
     
     Justification: The FTI’s collaboration with the government to “support businesses’ access to working capital during periods of increased export costs” directly addresses the need for financial support for industrial enterprises.
   • Target 9.b: Support domestic technology development, research and innovation in developing countries.
     
     Justification: The strategy of “providing knowledge, innovation, and advanced technology to businesses to develop and improve production processes” is a clear effort to support domestic technological upgrading and innovation within Thailand’s industrial sector.

3. Under SDG 17: Partnerships for the Goals

   • Target 17.11: Significantly increase the exports of developing countries.
     
     Justification: A core concern of the article is the impact of tariffs on Thailand’s exports. The FTI’s strategies, including “expanding new markets and trade networks,” are aimed at maintaining and increasing exports to ensure “long-term economic sustainability.”
   • Target 17.13: Enhance global macroeconomic stability, including through policy coordination and policy coherence.
     
     Justification: The FTI’s plan to “[Collaborate] with the Government on Policy Measures,” such as domestic tax measures and trade negotiations, is an example of domestic policy coordination aimed at mitigating external economic shocks and maintaining stability.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

While the article does not provide specific quantitative data, it mentions or implies several qualitative and quantitative indicators that can be used to measure progress:

• Value of exports: The article’s focus on the US as a “key export market” and the goal of expanding to “new markets” implies that the total value and volume of exports are key performance indicators. This relates to Indicator 17.11.1 (Developing countries’ and least developed countries’ share of global exports).
• Production efficiency and cost reduction: The plan to “reduce costs, increase production efficiency” suggests that metrics like manufacturing cost per unit or output per worker would be used to measure the success of technological upgrades. This relates to progress towards Target 8.2.
• Creation of higher value-added products: The goal to “foster higher value-added products” implies an indicator related to the proportion of high-value goods in the total export basket. This is a measure for Target 8.2 and relates to Indicator 9.2.1 (Manufacturing value added as a proportion of GDP).
• Access to finance: The initiative to “support businesses’ access to working capital” implies that an indicator would be the number of businesses or the total amount of capital provided through these support measures. This relates to Indicator 9.3.2 (Proportion of small-scale industries with a loan or line of credit).
• Market diversification: The strategy of “expanding new markets and trade networks beyond the US to diversify risk” suggests that an indicator would be the percentage of total exports going to non-US markets. This measures progress in risk diversification and supports Target 17.11.

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article.

Source: nationthailand.com