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Can Thailand benefit from the new era of diversified global trade?
Investments in supply chains are creating diversified economies in various countries. Examples include Malaysia, Thailand, Vietnam, Saudi Arabia, and the UAE.
The ongoing geopolitical and macroeconomic shocks have prompted a significant shift towards diversifying trade and supply chains, highlighting the importance of resilience.
The new era of diversification in global trade provides opportunities for smaller players, such as SMEs in developing countries, to participate in the global market and contribute to economic growth.
Investments in diversified supply chains are creating more resilient and economically beneficial trade corridors, connecting countries like Brazil, India, China, and the Middle East to foster collaboration and open markets.
More diversified economies
A second benefit is how investments in supply chains are creating diversified economies. Malaysia, Thailand and Vietnam are early examples of this in the Indo-Pacific. In the Middle East, Saudi Arabia, the UAE and others are undergoing their own transformations as they look to diversify from oil.
Thailand has the potential to benefit from the new era of diversified global trade in several ways. As a major exporter of goods such as electronics, automobiles, and agricultural products, Thailand stands to gain from increased market access and reduced trade barriers.
Additionally, the country’s strategic location in Southeast Asia positions it as a key player in regional trade initiatives such as the ASEAN Economic Community and the Regional Comprehensive Economic Partnership.
Furthermore, Thailand’s favorable investment climate and government support enhance its appeal for supply chain relocation. The Eastern Economic Corridor (EEC) development is designed to position Thailand as the primary economic hub in ASEAN, offering a wide range of investment prospects for businesses.
Thailand has signed 13 Free Trade Agreements (FTAs) and ratified the Regional Comprehensive Economic Partnership (RCEP) agreement, aiming to eliminate trade barriers and facilitate international trade.
The economic benefits are already spreading throughout the global economy as new factories and stores generate jobs and economic value in their respective communities. Additionally, they create value for the Asian, European, and American companies that have established them, as well as their home markets.
This diversification is evident in North America, with automakers bringing supply chains closer to home, and in Europe and Asia, with companies moving closer to their end consumers in North America. The economic benefits of these changes are rippling through the global economy, creating jobs and economic value in the communities where new factories and stores are located.
Main sources :
https://www.weforum.org/agenda/2024/01/a-new-era-of-diversification-trade-supply-chains/
https://kpmg.com/th/en/home/media/press-releases/2023/06/press-rethinking-supply-chains-en.html
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