Thailand’s upcoming free trade agreement (FTA) with the Russia-led Eurasian Economic Union (EAEU) is set to finish negotiations over the next few years. Should the FTA go through without a hitch, Thailand could see a huge boost to sectors such as agriculture, energy, and manufacturing.
The EAEU, a free trade bloc made up of Armenia, Belarus, the Russian Federation, Kazakhstan and Kyrgyzstan, has already signed an FTA with Vietnam and is set to sign another with Singapore in October. The bloc is also looking to conclude FTA talks with other Southeast Asian nations in order to negotiate an agreement with ASEAN collectively.
“At some point we would like to have a broader agreement with ASEAN and are already eager to have more open trade and closer relations with such a fast-growing region,” Maxim Oreshkin, the Russian minister of economic development.
Vietnam signed an FTA with the EAEU in 2016. This resulted in a huge boom in bilateral trade, with an estimated US$10 billion increase over three years from a near-zero starting point. Thailand’s trade numbers with Russia and the EAEU are nothing to brag about, but a successful FTA could lead to a similar increase in bilateral trade as Vietnam experienced.
According to minister Oreshkin, Russia is focusing on five main areas of trade cooperation with Thailand. These include: agriculture, energy, infrastructure, digital technology and financial services. In return, minister Oreshkin noted that Thailand would be a receptive market for Russian beef, fertiliser, and electrical equipment. In the long run, he speculates that Thailand would also benefit greatly from direct investment for nuclear reactors, railroads and other large infrastructure projects.
Another point that the minister noted was that the FTA would allow Russia to offload much of it’s manufacturing needs onto Thailand. Russia is currently suffering from low birth rates and a short supply of manpower. As a result, they are eagerly looking to Thailand, which sports high growth and low labour costs, to satisfy their manufacturing needs.
The country also wants to promote e-government services abroad, as Moscow has been rated the Number 1 city worldwide for e-government services by the UN, by providing logistical help to willing partners.