WORLD  TRADE  
ORGANIZATION   
WT/TPR/S/255/Rev.1 
8 February 2012  
 
(12-0766) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
THAILAND 
 
Revision 
 
 
 
 
This report, prepared for the sixth Trad e Policy Review of Thailand, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Thailand on its trade policies and 
practices. 
 
Any technical questions arising from this report may be addressed 
to Mr. John Finn (tel: 022/739 5081), Mrs. Martha Lara de Sterlini 
(tel:  022/739 6033), and Mr. Pete r Ungphakorn (tel:  022/739 5412). 
 
Document WT/TPR/G/255 contains the policy statement submitted by Thailand. 
 
 
 Thailand WT/TPR/S/255/Rev.1 
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CONTENTS 
 
  Page 
SUMMARY   vii 
I.  ECONOMIC ENVIRONMENT 1  
 (1)   INTRODUCTION  1  
 (2)   RECENT ECONOMIC DEVELOPMENTS  2  
 (3)   MAIN MACROECONOMIC POLICY DEVELOPMENTS  6  
 (i)   Inflation and exchange rates 6  
 (ii)   Fiscal policy 8  
 (iii)   Balance of payments 9  
 (4)   DEVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  10  
 (i)   Composition of merchandise trade 10  
 (ii)   Direction of merchandise trade 11  
 (iii)   Composition of trade in services 14  
 (iv)   Foreign direct investment (FDI) 14  
II.  TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 18  
 (1)   OVERVIEW  18  
 (2)   GENERAL CONSTITUTIONAL AND INSTITUTIONAL FRAMEWORK  18  
 (3)   STRUCTURE OF TRADE POLICY FORMULATION  20  
 (i)   Executive branches  of government 20  
 (ii)   Advisory, planning, and other bodies 20  
 (4)   TRADE POLICY OBJECTIVES  21  
 (5)   TRADE LAWS AND REGULATIONS  23  
 (6)   TRADE AGREEMENTS AND ARRANGEMENTS  27  
 (i)   Thailand and the WTO 27  
 (ii)   Preferential, regional, and bilateral arrangements 27  
 (7)   TRADE DISPUTES AND CONSULTATIONS  41  
 (i)   Dispute settlement under the WTO 41  
 (ii)   Other 43  
 (8)   FOREIGN INVESTMENT REGIME  43  
 (i)   Recent developments 43  
 (ii)   Basic framework 43  
 (iii)   International agreements 44  
III.  TRADE POLICIES AND PRACTICES BY MEASURE 46  
 (1)   INTRODUCTION  46  
 (2)   MEASURES DIRECTLY AFFECTING IMPORTS  48  
 (i)   Customs procedures 48  
 (ii)   Tariffs 50  
 (iii)   Other charges affecting imports 54  
 (iv)   Contingency measures 54  
 (v)   Non-tariff border measures 57 
  (vi) Technical measures 62 
  WT/TPR/S/255/Rev.1 Trade Policy Review 
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  Page 
 (3)   MEASURES DIRECTLY AFFECTING EXPORTS  67  
 (i)   Registration and documentation procedures 67  
 (ii)   Export taxes, charges, and levies 67  
 (iii)   Export prohibitions, restrictions and licensing 68  
 (iv)   Export assistance and incentives 71  
 (v)   Export financing and insurance 73  
 (4)   OTHER MEASURES AFFECTING INVESTMENT AND TRADE  74 
  (i) Taxation 74 
  (ii) Investment incentives 77 
  (iii) Competition policy 79 
  (iv) Price controls 82 
  (v) Government procurement and countertrade 84  (vi) Intellectual property rights 88 
IV.  TRADE POLICIES BY SECTOR 101 
 (1) A GRICULTURE  101 
  (i) Features 101 
  (ii) Trade in agriculture 102 
  (iii) Agriculture policies 104   (iv) Support levels 106 
 
 (2) F
ISHERIES  108 
 (3)   ENERGY   110  
 (i)   Introduction 110  
 (ii)   Hydrocarbons 110  
 (iii)   Electricity 113 
 (4) S ERVICES  115 
  (i) Main features and multilateral commitments 115   (ii) Financial services 116 
  (iii) Telecommunications 127 
  (iv) Transport 132 
  (v) Tourism 139 
REFERENCES   143 
APPENDIX TABLES  151  
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CHARTS 
    P a g e  
I. ECONOMIC ENVIRONMENT 
I.1 Composition of merchandise trade, 2007 and 2010 12 
I.2 Direction of merchandise trade, 2007 and 2010 13 
II TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  
II.1 From policy to law:  how government-initiated legislation passes through the Thai system 19 
II.2 ASEAN 'Noodle bowl' 28 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Tariff distribution by type of duty, 2011 51 
III.2 MFN applied tariff averages and dispersion by product groups, 2011 53 
 
IV. TRADE POLICIES BY SECTOR IV.1 Agriculture support, 2000-07 107 
IV.2 Amber box support (including de minimis ) in Thailand, 2000-07 108 
IV.3 Export of selected fisheries products, 2004-10 109 IV.4 Interest rate spread, 2007-10 122 
TABLES 
I. ECONOMIC ENVIRONMENT  
I.1 Selected macroeconomi c indicators, 2007-10 3 
I.2 Basic economic indicators, 2007-10 5 I.3 Balance of payments, 2007-10 10 
I.4 Trade in services, 2007-10 14 
I.5 Inflows of foreign direct investment, 2007-10 15 I.6 Outflows of foreign direct investment, 2007-10 16 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  
II.1 Main trade-related legislation, June 2011 24 
II.2 Latest notifications under WTO Agreements to June 2010 or from August 2007 
 to June 2010  25 
II.3 Status of bilateral and re gional trade agreements 29 
II.4 Thailand's use of preferences under free-trade agreements, 2010 33 
II.5 Dispute settlement cases, 2011 41 
III. TRADE POLICIES AND PRACTICES BY MEASURE III.1 Tariff structure, 2006 and 2011 50 
III.2 Anti-dumping measures 56 
III.3 Products subject to import licensing and prohibition, 2011 57 III.4 Export duties, January 2011 68 
III.5 Products subject to export licensing, registration requirements or prohibitions, 2011 69 
III.6 The top 10 export products from the I-EA-T free zones, 2010 73 WT/TPR/S/255/Rev.1 Trade Policy Review 
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    P a g e  
III.7 Central government tax revenue by source, 2006/7-09/10 75 
III.8 Investment in BOI approved projects, 2007-10 79 
III.9 Cases referred to the Trade Competition Commission, 1999-2010 81 III.10 Products and services subject to monitoring, October 2006 83 
III.11 Public procurement by method, 2005-09 85 
III.12 Public procurement by  agency and method, 2010 86 
III.13 Copyright notifications, 2005-10 91 
III.14 Trade marks and patents, 2005-10 92 
III.15 Geographical indications, 2005-10 94 III.16 Traditional knowledge notifications, 2006-10 95 
III.17 Suppression of intellectual property rights violation, 2006-10 98 
IV. TRADE POLICIES BY SECTOR  IV.1 Production of selected agricultural products, 2003-10 101 
IV.2 Exports of selected agricultural products, 2005-10 103 
IV.3 Imports of selected agricultural products, 2005-10 103 IV.4 Petroleum, natural gas and coal, production and reserves:  2000-09 111 
IV.5 Taxes and duties on fuel, 2007-11 112 
IV.6 Power generation by fuel type, 2003-10 113 
IV.7 Structure of the Thai banking system:  number of institutions and their respective 
 market share, 2007-10 117 
 
APPENDIX TABLES 
I. ECONOMIC ENVIRONMENT  
AI.1 Merchandise exports by group of products, 2007-10 153 
AI.2 Merchandise imports by group of products, 2007-10 154 
AI.3 Merchandise exports by destination, 2007-10 155 AI.4 Merchandise imports by origin, 2007-10 156 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
AIII.1 Summary analysis of Thailand's MFN tariff, 2011 157 
AIII.2 Summary analysis of Thailand's sel ected preferential tari ff averages, 2011 159 
 
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SUMMARY  
 
1. For over 30 years Thailand has 
pursued a policy of export-led development 
that has successfully turn ed the county into a 
major exporter of industrial goods and led to rapid economic growth, particularly in the 1990s.  Growth slowed in the 2000s - due partly to lower investment growth and 
infrastructure bottlenecks - but still remained 
strong at an average of 5.7% between 2003 and 2006.  Although the 2008 global financial crises led to a fall in GDP in 2009, growth picked up again in 2010 when it reached 7.8%.  Between 2007 and 2010 GDP per capita rose 
from US$3,740 to US$4,737, and Thailand has 
been able to reduce poverty and meet its Millennium Development Goals, although significant income and regional disparities remain. 
2. Thailand has an open economy, with 
the value of exports and imports equivalent to about 135% of GDP in 2010.  It was the world's 19 largest exporter and the 17 largest importer of goods in 2010.  As regards world trade in commercial services, it ranked 16 as 
exporter and 14 as importer.  This 
outward-orientation makes Thailand vulnerable to external shocks but has also contributed to the resilience of the economy in adapting to challenges.  Underpinning this 
resilience has been sound macroeconomic, 
including fiscal, policies with current account surpluses and high levels of international reserves. 
3. The value of trade in goods increase 
by 27% in 2007-10 as exports increased to 
US$195.3 billion and imports to US$182.4 billion.  Most exports are of manufactured and processed goods and most imports of raw materials and machines.  The pattern of export trade has changed as exports 
to developed countries have increased at a 
slower pace than exports to other Asian countries, and China has replaced the United States as the main destination for Thailand's exports.   4. Thailand also has a positive balance of 
trade in services, of US$6.5 billion, with a 
large surplus in tourism and related services 
offsetting net-payments for other areas.   
5. The main macroeconomic concern for 
Thailand has been the dec line in foreign direct 
investment, which was partly caused by the 
political unrest that affected much of the 
period under review.  Other reasons for the decline include the restrictions on foreign ownership, particularly on services and agriculture, as well as complex and time-consuming systems for paying the different 
taxes. 
6. The political instability has also 
delayed reforms in several areas, including intellectual property, priv atization, and several 
services subsectors. These delays have also 
contributed to the lower levels of FDI.   
7. As a member of the ASEAN group, 
Thailand is committed to deepening economic integration among members, including removing obstacles to trade and improving trade facilitation. 
8. Thailand, both unilaterally and 
through ASEAN, has continued to pursue a policy of negotiating free-trade agreements of varying scope with the focus on the Asia-Pacific area.  In the absence of comprehensive 
multilateral agreement on trade liberalization, 
the focus on free-trade agreements is understandable but the complex web of agreements with different rules of origin means it can be hard for traders to benefit from 
them. 
9. Thailand's adoption of the ASEAN 
Harmonized Tariff Nomenclature has had the effect of increasing the number of tariff lines in its tariff book, but the actual rates on different products have not changed much 
since the last Review of Thailand and, on 
average, tariffs are applied at less than half their bound levels.  Also unchanged is the complicated tariff structure with different WT/TPR/S/255/Rev.1 Trade Policy Review 
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ad valorem , specific duty, and alternate duty 
rates.  Over a quarter of tariff lines are unbound (including, according to the authorities, some agricultural products). 
10. Thailand continues to use complicated 
systems for excise duties, personal income tax, and corporate income tax, with a broad range of tax incentives for investments in different parts of the country.  The complex tax 
structure contributes to Thailand's low rating 
for ease of paying taxes.  Although a considerable effort is being made to simplify the tax assessment and payment systems, it would also help to simplify the taxes themselves, particularly excise duties and 
tariffs. 
11. One area where progress has made 
compliance easier has been in customs procedures.  Since 2008, they have been fully paperless and, in the near future, they are 
expected to move to a single-window service.  
However, Thailand has not completed the legal amendments necessa ry to comply with 
the Revised Kyoto Convention on customs procedures, and the perception of corruption in the Customs Department persists. 
12. The law on anti-dumping and 
countervailing measures has not changed over the past six years.  Between 1 January 2007 and 31 May 2011, 6 new investigations were initiated; 19 cases were reviewed and anti-
dumping duties were continued; and in 5 cases 
anti-dumping duties were terminated.  A new law on safeguards introduced in 2007 covers initiation of investigations, the option of applying provisional safeguard action, 
investigations, and the application of definitive 
safeguards.  As of end-April 2011, provisional safeguards have been applied in one case. 
13. Non-automatic import licensing is 
required for a variety of  products and justified 
for a number of reasons, such as price 
monitoring, for public health, and protection 
of domestic producers. 
14. A limited number of products, mostly 
unprocessed wood, are subject to export taxes, with applied rates of tax lower than the 
statutory maximums.  Other export licensing requirements and controls are normally associated with meeting international 
obligations or for environmental, public 
health, and intellectual property protection reasons. Exports of some types of oil cakes are not generally allowed, in order to prevent domestic shortages.   
15. Thailand has eliminated export 
subsidies under several programmes but maintains a number of schemes to promote and facilitate exports.  These export supports include: bonded warehouses, duty drawbacks, and tax refunds for import duties and VAT.   
Thailand continues to promote foreign direct 
investment through tax advantages for investments in less developed areas of the country and through the I-EA-T free zones.  The authorities pointed out that there are no 
export-related require ments or privileges 
attached to such investments. 
16. The widespread use of price controls 
continues, with a large number of products subject to varying degrees of control.  These include a requirement for approval before 
prices can be changed, through prior 
notification of price changes, to price labelling.  Although such measures may control prices for consumers in the short-term, they also distort market signals and delay 
restructuring. 
17. In line with official policy to increase 
the contribution to the economy from creative industries, the Department of Intellectual Property in the Ministry of Commerce has 
been encouraging the creation of intellectual 
property, including through registration, enforcement, and trading.  Thailand has made some use of compulsory licensing for medical drugs with seven licences issued in 2006-08.  Some royalties are paid, and the generic drugs 
are meant for those that cannot afford the 
patented version.  While the Thai government argues that it has acted in good faith, going beyond its obligations, some countries remain concerned about the way compulsory licences 
are used.  Some countries are also concerned Thailand WT/TPR/S/255/Rev.1 
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about piracy in Thailand although they also 
recognize the efforts being taken to reduce it. 
18. Agriculture remains the main source 
of employment, and Thailand is a major 
producer and/or exporter of several 
agricultural products, particularly rice and rubber.  Agricultural policies vary from one product to another.  In the case of rice, production used to be supported through a 
mortgage system, which provided farmers 
with loans with the rice crop as collateral and loans were repaid either in cash or the crop.  This was changed to a deficiency payment system that provides full compensation for farmers whenever prices fall below a target 
price and back to a mortgage scheme in late 
2011 with a significant increase in prices raising concerns about its impact on international prices which have been exacerbated by recent flooding.  Sugar is also 
supported through prices set by the Cane and 
Sugar Board.  However, world sugar prices have been higher than the set prices leading to concerns about domestic shortages. 
19. Although Thailand is a net importer of 
energy, including oil and natural gas, it is also 
an exporter of refined petroleum products as it 
imports crude for refining and export.  The State continues to be heavily involved in prospecting and the production of hydrocarbons through the PTT Public 
Company Limited, which is 51% state-owned.  
The State also controls prices of fuels using the Oil Fund to tax some fuels and subsidize others, particularly petrol/ethanol mixes and biodiesel.  Ethanol is produced from sugar 
cane and tapioca and biodiesel from palm oil. 
20. The basic structure of the electricity 
subsector has not changed since the last Review.  The state enterprise (the Electricity Generating Authority of Thailand) produces just under half of all electricity generated in 
Thailand; and the two distribution companies 
are also state-controlled.  However, regulation of the sector has been reformed with the establishment of the independent Electricity Regulatory Commission for electricity 
generation, transmission, distribution, and retail, and for gas transport and supply as well 
as for LPG terminals.  The Commission is also responsible for setting electricity tariffs, subject to the approval of the National Energy 
Policy Council.   
21. Overall, the liberalization of 
Thailand's services sector, which makes up a large part of the Thai economy, is ongoing.  Restrictions remain on market entry and 
foreign equity participation in several 
subsectors, and the regulatory framework is complex. Although ownership restrictions have been relaxed in some cases, these decisions appear to have been on a taken on a discretionary basis. Rationalizing the 
regulatory regime and increasing competition 
could help to enhance innovation and productivity, and hence further increase the economy's competitiveness. 
22. In the banking subsector, increased 
foreign participation has contributed to 
improving competitiveness and growth but some foreign ownership restrictions remain in place.  The State continues to play an important role in the financial sector through equity holdings in commercial banks and 
through the specialized financial institution, 
which provide finance to low-income households and specific economic sectors, including agriculture, housing, and export promotion. 
23. Under Phase I of the Financial 
Services Master Plan, a new law that entered into force in 2008 consolidated and enhanced existing legislation a nd improved supervision 
of the sector by the Bank of Thailand, while 
the latter's autonomy was increased by an 
amendment to the Bank of Thailand Act.  Phase II of the Master Plan started in 2010 and is to address operating costs, improving competition, improving access to financial services, and strengthening financial 
infrastructure.  Although much progress has 
been made in increasing competition and improving oversight and security, some concerns remain, particularly about regulation of the specialized financial institutions, which 
have a separate regulatory regime, along with WT/TPR/S/255/Rev.1 Trade Policy Review 
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the wide spread between commercial banks' 
deposit and lending rates. 
24. New legislation has been introduced 
for insurance services and capital markets with 
the objective of improving oversight and 
increasing competition.  Although the law on foreign participation in insurance companies has been relaxed, restrictions remain in place. 
25. The telecommunication sector has 
continued to grow but at a slower pace than in 
previous review periods.  Competition has also increased, although the degree varies from one sector to another, and the two state-owned enterprises continue to play a major role.  Furthermore, the 3G licensing process has 
been delayed due to legal proceedings, with 
the result that private sector operators do not yet have licences.  Although foreign participation in telecommunication is increasing, restrictions remain on service 
providers that own thei r own networks.  Under 
legislation passed in late 2010, which a new single regulator will be established to oversee the broadcasting and telecommunication industry.  
26. The Government actively promotes 
the transport industries through fiscal and 
financial incentives, and encourages private sector participation in infrastructure development.  However, the regulatoryframework for the provision and management 
of infrastructure services is complex, and restrictions on foreign investment apply in all transport subsectors.  In air transport, Thailand 
implements a "gradual open skies policy" and 
maintains 99 bilateral air services agreements as well as several ASEAN agreements through which traffic rights have been liberalized.   A public company, in which the Government 
holds a 70% stake, operates the six main 
international airports, which are responsible 
for most of Thailand's air traffic. 
27. Domestic shipping is reserved to Thai 
vessels.  Although there are generally no restrictions on access to cargoes to and from 
Thailand, the domestic shipping industry 
continues to receive protection through a cargo reservation policy.  Goods imported directly or indirectly by government agencies or public enterprises must be transported by Thai-
flagged vessels on designated shipping routes 
where such vessels are available.  A state enterprise manages Thailand's five main public ports.  Private companies may be authorized to operate port services. 
28. Tourism continues to have a crucial 
role in the Thai economy.  It is a major source 
of foreign exchange, investment, job creation, and government revenue.  Provision of tourist guide services is reserved for Thai nationals.