Essay about Thailand´s International Trade Policy

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I. Introduction Improving the value of exports is the primary goal of Thailand’s international trade policy. The Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) was established as an effective cooperative strategy for gaining market advantages through regional market integration. Thailand aims to capitalize on trade agreements by networking and entering partnership with neighboring countries. Currently, Thailand’s cross-border trade in the Greater Mekong Subregion (GMS) plays a crucial role in globalization, because it facilitates rapid and convenient trade and investment. Countries seek new export markets to disperse the risk of domestic market concentration, as evidenced by the economic recessions affecting…show more content…
However, GMS countries hold differing perspectives on the management of geographic and economic potentials. This supposition has been considered a key factor in GMS economies, specifically because geographic proximity leads to similarities in ethnicities, religions and culture. The high annual revenues Thailand receives through trade with neighboring GMS countries is an indicator of considerable increases in future trade. Thus, to determine the directionality of competitiveness among GMS markets, Thailand is a suitable basis for assessing the benefits and differences among GMS countries, as well as how these aspects drive the GMS economies. This study was conducted to (a) determine which market is the most dynamic for Thai exports, (b) measure the intensity of trade between Thailand and its regional trading partners and (c) test whether the modified Revealed Comparative Advantage (RCA) index, which was developed based on the gravity trade model, is applicable for measuring Thailand’s competitiveness resulting from its border trade policy. The RCA index is typically applied based on three conceptual points. First, the trade balance index (TBI) can be used to indicate whether GMS countries are net exporters or importers. Second, the trade balance is typically decomposed by product and country (i.e., bilateral trade balance). Relevance refers to the degree of concentration of trade imbalances
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