Thailand aims to finalise a Free Trade Pact with the European Union by Christmas 2025, despite escalating global trade tensions and concerns over Chinese product dumping impacting local industries. Talks progress with key chapters tentatively agreed upon.
Commerce Minister Panya Niratmanon on Wednesday told reporters that Thailand hopes to finalise a Free Trade Pact with the European Union by December 25, 2025. Finalising the deal with the kingdom’s fourth-largest trade partner would help stabilise what is currently a chaotic trade environment. However, talks are still ongoing, with discussions in June to look at investment considerations between Thailand and the European Union’s 27-member bloc. This comes as the US-China trade tension escalated on Wednesday with a barrage of massive tariffs and counter-tariffs being imposed. The situation is already affecting global financial markets more than at any time since the COVID crisis in 2020.
Amid a blazing trade brawl between China and the United States and the full US Reciprocal tariff regime going into effect on Wednesday, there is some good news. Commerce Minister Panya Niratmanon says a European Union-Thai free trade deal would be ready by the end of 2025. He was speaking on Wednesday.
He spoke after the 5th round of talks between European Union negotiators and Thai counterparts in Brussels. These talks took place from March 31st to April 4th.
In short, the Director-General of the Department of International Trade Negotiations, Ms. Chotima Iamsawasdikul, assured him negotiations reached a new level. Certainly, all is set for the 6th round of talks in Bangkok from June 23rd to 27th.
Thailand makes significant progress in EU-Thai free trade talks, with key chapters tentatively agreed upon
Following the latest talks, Mr. Pichai confirmed that both sides made significant progress. He added that the 5th round yielded satisfactory outcomes for Thailand. According to Ms. Chotima, two chapters were tentatively agreed upon.
One on customs procedures and trade facilitation (CTF) and another on the Sustainable Food System (SFS). The CTF chapter aims to make customs procedures more efficient and modern.
Meanwhile, the SFS chapter supports the development of a resilient, sustainable food infrastructure. Additionally, both sides have begun discussing market access for goods.
An exchange of initial proposals on services and investment is planned for early June 2025. These steps are crucial for preparing for the next negotiation round.
Survey reveals growing concerns over Chinese product dumping, posing a significant challenge to Thai business
At the same time, a survey by the Federation of Thai Industries (FTI) had bad news. It raised concerns about the increased dumping of Chinese products in Thailand.
Thai business leaders fear that Chinese firms, with their technological advantage and state subsidies, can undercut Thai firms on price. Despite applying strict industry standards, Thai firms face an uphill battle. As a result, many areas of Thailand’s economy, especially its manufacturing base, could be wiped out.
The FTI survey revealed that 70.9% of members view Chinese firms as a threat. Furthermore, 90.7% admitted that Chinese firms can produce goods more cheaply than their Thai counterparts.
Meanwhile, the trade war between China and Thailand escalated further on Wednesday evening. Following the US’s imposition of a 50% tariff on Chinese goods, China retaliated for the second time in a week.
It imposed an additional 84% tariff on US imports and hinted at blocking US agricultural imports.
US-China tariff war intensifies with new tariffs on Chinese goods, sparking global concern on markets
The US action, which started at 00:01 Washington time on April 9, raised total tariffs on Chinese goods to 104%. This followed previous tariff increases. President Trump had warned China to lift a 34% tariff on US imports or face further retaliatory measures.
When China refused, the US activated an additional 50% tariff. In response, China’s Ministry of Commerce condemned Washington’s escalation as “blackmail.” They vowed to “fight to the end.”
Analysts warned that such tariffs could severely damage global markets. Indeed world markets are already in a situation unseen since the start of the COVID-19 pandemic.
US Treasury Secretary Scott Bessant defended the American position. He said China was at a disadvantage and called their retaliation a “game of annihilation.” He noted that the imbalance in trade volumes favours the US.
Thailand optimistic despite global trade tensions, hopes to conclude EU FTA by December 2025
Despite the escalating global trade environment, Thailand remains optimistic. It hopes to conclude an FTA with its fourth-largest trading partner, the European Union.
On Wednesday, Mr. Pichai expressed his hope that talks will be successfully completed by Christmas Day, December 25th, 2025.
After the latest round, the European Commissioner for Trade, Mr. Maros Sefcovic, congratulated Minister Pichai. He welcomed the momentum and expressed the EU’s commitment to finalising the FTA quickly.
Both parties share an urgent desire for a stable, predictable trade agreement amid rising geopolitical tensions. Minister Pichai said it was in line with Prime Minister Paethongtarn Shinawatra’s policy of expanding Thailand’s global trade footprint.
In brief, the government is fast-tracking FTA negotiations to attract investment and build economic resilience.
Thailand’s growing trade with the EU continues to boost economy as FTA talks progress amid external pressures
Presently, the EU is Thailand’s fourth-largest trading partner, following China, the United States, and Japan.
In 2024, bilateral trade between Thailand and the EU was valued at $43.53 billion, up 4.26% from the previous year. Exports to the EU rose over 10%, while imports fell slightly, resulting in a trade surplus of $4.88 billion.
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With the next round of negotiations scheduled for June 23–27 in Bangkok, hopes are high. The government particularly sees the EU-Thai FTA as a vital economic boost, especially in the face of mounting external pressures.
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Further reading:
PM addresses the nation in shock over last week’s earthquake and this week’s Trump tariff bombshell
Finance Minister to travel to US to import more US food and motorbikes while lowering Thai tariffs
Trump’s trade war coming down hard on Thailand despite reports of talk. Reciprocal tariffs days away
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Economy sees sharp setback with lower private spending, investment and foreign tourism income
