UAE and Thailand Explore Trade Agreement to Foster Investments
UAE and Thailand Explore Trade Agreement to Foster Investments ASEAN Briefing
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Thailand and UAE to Launch Negotiations for Comprehensive Economic Partnership Agreement (CEPA)
Introduction
Thailand and the United Arab Emirates (UAE) have agreed to initiate negotiations for the establishment of a Comprehensive Economic Partnership Agreement (CEPA) and a Business Council. This partnership aims to enhance bilateral trade and investment cooperation between the two countries. The agreement is expected to be implemented by mid-2024.
Increasing Bilateral Trade
The UAE and Thailand have set a target to increase bilateral trade by 10 percent within the first year of implementing the CEPA. In 2022, bilateral trade between the two countries reached US$20.8 billion, marking a significant increase of 73 percent compared to the previous year. The UAE enjoyed a trade surplus of approximately US$14 billion.
- The UAE exported goods worth US$17.4 billion to Thailand in 2022, with crude oil, refined oil, and natural gas being the major exports.
- Thailand’s exports to the UAE amounted to US$3.4 billion, including car equipment and components, air conditioning units, agriculture, and telecommunication equipment.
- Non-oil trade between the two countries increased by 21 percent in 2022, reaching US$6.1 billion.
Opportunities for UAE Investors in Thailand
The UAE has shown significant interest in investing in Thailand, with foreign direct investments (FDI) reaching US$300 million by the end of Q3 2022. This represents 52 percent of all FDI from the Middle East region. The CEPA will provide UAE investors with greater access to the large Thai market and the wider Southeast Asia market, which consists of more than 600 million consumers.
Thailand’s Manufacturing Sector
Thailand’s economy heavily relies on exports, with the manufacturing sector playing a crucial role. In 2021, the manufacturing sector contributed 27 percent to the country’s GDP. Thailand aims to attract investments for mid/high-tech manufacturing, particularly as neighboring countries like Vietnam and Cambodia have become centers for low-cost production.
Electrical and Electronics (E&E) Sector
Thailand’s E&E sector is a major contributor to its exports. In 2021, E&E products accounted for over US$42 billion in exports. Thailand is the world’s second-largest exporter of hard disk drives, washing machines, and air conditioners. The country boasts a robust E&E supply chain, including global giants like Samsung, Toshiba, Mitsubishi, Sony, LG, and Siemens. With increasing global demand for smart devices, Thailand has the potential to become a leading supplier in the E&E sector.
High-End Tourism
Thailand’s tourism industry has been significantly impacted by the COVID-19 pandemic. However, the country aims to rebuild its tourism sector and expects to welcome 25 million foreign visitors in 2023. High-end tourism plays a crucial role in Thailand’s economy, accounting for 18-20 percent of its GDP in 2019.
Halal Food Manufacturing
Despite being a Muslim minority country, Thailand is a major exporter of Halal products. It ranks 12th globally in Halal product exports and is the fifth largest producer of Halal foods. Thailand’s Halal food exports account for 20 percent of its total food exports, with a significant portion going to Muslim-dominated countries such as Indonesia, Malaysia, and Brunei. Thailand has the potential to become a hub for Halal F&B manufacturing in the region.
Smart Farming and Precision Agriculture
Thailand’s fertile soil and favorable weather conditions make it a potential global agricultural powerhouse. The agriculture sector currently contributes six percent to Thailand’s GDP and employs one-third of the country’s total workforce. Thailand aims to transform its agriculture sector through the use of new technologies, such as smart farming and precision agriculture, to increase production yields.
Conclusion
The establishment of a Comprehensive Economic Partnership Agreement (CEPA) between Thailand and the UAE will create new opportunities for trade and investment cooperation. The UAE’s investments in Thailand have shown promising growth, and the CEPA will further enhance economic ties between the two countries. Thailand’s manufacturing sector, high-end tourism, Halal food manufacturing, and smart farming present significant opportunities for UAE investors. By leveraging these opportunities, both countries can contribute to achieving the Sustainable Development Goals (SDGs) outlined by the United Nations.
SDGs, Targets, and Indicators
1. SDGs addressed or connected to the issues highlighted in the article:
- SDG 8: Decent Work and Economic Growth
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 12: Responsible Consumption and Production
- SDG 17: Partnerships for the Goals
2. Specific targets under those SDGs based on the article’s content:
- SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries.
- SDG 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries.
- SDG 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
- SDG 17.6: Enhance North-South, South-South, and triangular regional and international cooperation on and access to science, technology, and innovation and enhance knowledge sharing on mutually agreed terms, including through improved coordination among existing mechanisms, particularly at the United Nations level, and through a global technology facilitation mechanism.
3. Indicators mentioned or implied in the article to measure progress towards the identified targets:
- Gross domestic product (GDP) growth rate
- Share of employment and GDP contributed by the industrial sector
- Sustainable management and efficient use of natural resources
- Cooperation on science, technology, and innovation
Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 8: Decent Work and Economic Growth | 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries. | Gross domestic product (GDP) growth rate |
| SDG 9: Industry, Innovation, and Infrastructure | 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries. | Share of employment and GDP contributed by the industrial sector |
| 17.6: Enhance North-South, South-South, and triangular regional and international cooperation on and access to science, technology, and innovation and enhance knowledge sharing on mutually agreed terms, including through improved coordination among existing mechanisms, particularly at the United Nations level, and through a global technology facilitation mechanism. | Cooperation on science, technology, and innovation | |
| SDG 12: Responsible Consumption and Production | 12.2: By 2030, achieve the sustainable management and efficient use of natural resources. | Sustainable management and efficient use of natural resources |
| SDG 17: Partnerships for the Goals | 17.6: Enhance North-South, South-South, and triangular regional and international cooperation on and access to science, technology, and innovation and enhance knowledge sharing on mutually agreed terms, including through improved coordination among existing mechanisms, particularly at the United Nations level, and through a global technology facilitation mechanism. | Cooperation on science, technology, and innovation |
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Source: aseanbriefing.com
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