Free Trade Agreements (FTAs) and Export Structures in Thailand

This study aims to investigate the role of (in-effect) FTAs in influencing export structures, defined as intensive and extensive margins (products and markets) and sophistication at product level using Thailand’s FTA-partner countries as a case study during 2006-2020. The results show that FTAs tended to generate favorable impacts in enhancing export structures in Thailand, except extensive margins in terms of new products. The preferential treatments noticeably expanded (existing) export products of Thailand into the FTA-partner countries (extensive margins in terms of market) while helped maintain traditional products exporting into these countries. Impacts of FTAs in improving intensive and extensive margins were pronounced in Middle-income partners and in manufacturing products. ASEAN and China were export destinations where FTAs driven intensive and extensive margins (markets) played a noticeable role. Regional FTAs, including ASEAN-Japan and ASEAN-Australia-New Zealand showed a limited role in boosting intensive and extensive margins. Apart from FTAs, trade liberalization through unilateral/multilateral liberalization of the partner countries was crucial in expanding (existing) Thai products into these markets. Importance of AFTA and ASEAN-China FTA was also observed when export sophistication is concerned. Imports through FTAs only helped enhance export sophistication, while there is no evidence observed in cases of intensive and extensive margins