Why International Trade is important for Thailand,

what challenges does it face in 2010?

International trade is very important in globalization. Many countries decide to go international to

expand their market to other countries and get lot of benefits such as lower cost and keep
strong relationship with other countries, Thailand also. Beginning of Thailand International Trade
has begun in the 15th centuries, during the reign of the Ayutthaya monarchy, foreign merchants
who lived near the kingdom's capital conducted trade with foreigners.

To develop and grow in the world of globalization, Thailand started becoming a member of
several international trade organizations including the ASEAN Free Trade Area (AFTA), the
Asia Pacific Economic Cooperation (APEC), World Trade Organization (WTO) and Free Trade
Agreement with other countries such as China, India and Australia.

Since 1986, Thailand had rapidly increased in exporting and doing business with foreign
countries. This situation became a major prove of overall growth for the Thai economy by both
local firms and foreign direct investment.

Thailand got a lot of benefits from enrolling in international trade. First of all, towards
employment & labor acknowledgement. International activities increase Thailand employment
rates because foreign firm decide to locate in Thailand in order to lower cost for their production
facility and they see the opportunity of getting lower labor cost for their operation. Moreover,
international business comes with technologies which provide opportunities for Thai domestic
labor and domestic company to develop their skills to meet world challenges. Result of this
action, it lead to improve standard of living of Thai people from job and income generating.

The next reason is international activities have powerful influence on the economy of Thailand.
It helps Thai economy grow up that lead many countries confident and want to invest in
Thailand. Thailand can get a lot of money from an import duty which is a part of government
income and they use this money to develop the country.

From research by Export Promotion Department of Thailand, they presented that more than 2/3
of Thailand GDP has rely on exporting as a major source of Growth, not only for agricultural
products but also attracting foreign trade & investment including various types of manufacturing
industries and especially Automotive & Tourism industry.

Today, Thailand main domestic factor that has most impact on Thailand International Trade is
“Political Uncertainty Crisis”. This problem can reduce investors & customers’ confidence
including tourists. For important international factors such as “World Economy Recession” affect
Thailand and world economy. However, there are many factors those can affect Thailand also
World International Trade & Reputation such as conflict with Cambodia, Violence in Southern
Area of Thailand, Greek Financial Crisis even Earth disaster such as Global warming.

In 2010, Thai authorities will face a challenging task to manage rising flows of capital in search
of higher yields. For fiscal policy, the challenge is to start reducing budget deficits while boosting
public investment.

Finally, Thailand should create a new strategy to maintain growth for creating many jobs, and
developing workers’ skills so that Thailand can enjoy innovation-led growth.
 References : Source of Information

Thailand Department of Export Promotion : www.depthai.go.th/

Economy of Thailand Wikipedia : http://en.wikipedia.org/wiki/Economy_of_Thailand

Thailand economy 2010: blogs.worldbank.org/eastasiapacific/node/2857

Thailand international trade : http://www.idrc.ca/en/ev-68148-201-1-DO_TOPIC.html

Origin of Thais : www.hellosiam.com/html/thailand/thailand-history.htm