Thailand and EFTA Conclude Landmark Free Trade Agreement

Thailand has officially concluded negotiations on a Free Trade Agreement (FTA) with the European Free Trade Association (EFTA) comprising Iceland, Liechtenstein, Norway, and Switzerland

Key takeaways

• Thailand has finalized its first Free Trade Agreement with the European Free Trade Association (EFTA), comprising Iceland, Liechtenstein, Norway, and Switzerland, marking a significant milestone in its trade history.
• The FTA covers 15 major issues including trade in goods, trade facilitation, intellectual property, and sustainable development, and is expected to bring tangible economic benefits to Thailand once ratified by parliament.
• The successful conclusion of the Thailand-EFTA FTA reflects the government’s commitment to expanding trade and investment opportunities, and sets the stage for further negotiations with key partners such as the European Union

The Ministry of Commerce’s Trade Negotiations Department played a central role in finalizing the terms, which span 15 key areas, including trade in goods, investment, intellectual property, technical barriers to trade, and sustainable development. 

EFTA consists of four member countries: Iceland, Liechtenstein, Norway, and Switzerland. Since June 20, 2022, negotiations for an agreement with Thailand have been underway, with both parties aiming to conclude within two years. They have been alternating negotiation rounds to finalize the terms.

The agreement also includes provisions for small and medium-sized enterprises (SMEs), emphasizing inclusivity and collaboration.

Minister of Commerce, Pichai Naripthaphan, expressed his satisfaction with the agreement, highlighting that it is a critical component of the government’s broader strategy to expand trade and investment opportunities. 

The FTA will facilitate trade between Thailand and EFTA member countries, enhancing Thailand’s export potential in key sectors, such as jewelry, machinery, electronics, and processed foods.

In return, Thailand is expected to benefit from the increased import of high-quality goods and services, ranging from pharmaceuticals to industrial equipment.

In the period from January to October 2024, trade between Thailand and EFTA already reached a total of $10.29 billion, representing a year-on-year growth of 23.22%.

Following the conclusion of the negotiations, the Thai government plans to submit the finalized agreement to the Cabinet for approval in early 2025.

Once approved, the FTA will be signed in January 2025 during the World Economic Forum (WEF) in Davos, Switzerland, with Prime Minister Paetongtarn Shinawatra and Commerce Minister Pichai Naripthaphan representing Thailand.

After the signing, the agreement will be sent to the Thai Parliament for ratification, paving the way for its eventual implementation.

The successful conclusion of the FTA with EFTA is expected to open the door for further negotiations with other global trade partners, particularly the European Union (EU), with which Thailand is already in discussions to finalize an FTA by 2025.

 As Thailand seeks to diversify its economic relationships, the EFTA agreement represents a key step toward achieving a more open, inclusive, and competitive trade environment.