Impact Of EHP Trade Between Thailand And China On Thailand Agricultural Sector

This study examines the development,features and implications of the ASEAN-China Free Trade Area(FTA)on regional economies.It particularly focuses on the economic benefits of the ASEAN-China FTA from the perspective of Thailand,the potential impacts of the Early Harvest Program(EHP)on its agricultural sector and recommended policy responses for Thailand.The analysis is primarily based on in-depth consultation with stakeholders and secondary data analysis of current trade patterns between China and Thailand,with some references to trade between China and Thailand.The study found that the ASEAN-China FTA provides advantages and economic benefits.The EHP offers promising prospects for Thailand agricultural development through the exported products,especially vegetables and fruits to the dynamic Chinese market.However,these benefits have not materialized yet because Thailand has not fully met the prerequisites of a sound business climate,adequate legal framework,provision of basic infrastructure and effective public institutions.The evidence from this study implies that the competitiveness of Thailand's agriculture and enterprises continues to be relatively low.The study also uses economic theoretical models,RCA Index and Gravity Model to analyze the competitiveness in vegetables and fruits export of Thailand in Chinese market and indicate the factors affect Thailand-China bilateral trade.The results of this study indicate that Thailand has the disadvantage of fruits and vegetables export to China.However the RCA index shows the positive change of Thailand's competitiveness in Chinese market,the RCA Index shows the continual increase,even if it's less than unity.It is a good warning alert to Thailand that there is an expectation to compete and take the advantage in Chinese market in the future.Further finding apart from the RCA Index highlighted by the Gravity model,the growth of trade volume connects with:(1)the increase in economic size(import and export value);(2)distance,language and border between the country relates to increase of transaction cost,the lower in trade cost leads to the increase of trade volume;and(3)trade agreement and government policy also affects the increase of trade volume.In the case of Thailand-China EHP,Thailand export to China is standing below theaverage point,especially in agricultural sector.The results from such analyses implicate that the EHP as the consequence of CAFTA has a positive impact on Thailand economic by increasing the export.However Thailandstill lacks of ability to compete in Chinese market.It is not directly caused from the EHP,but other determinants such as geographic and financial sector.Consequently,the government support is very important factor for rising up Thai agriculture in the global market by extending trade facilities,reducing custom duties,developing the transportation and logistics route,distributing the information and knowledge to the farmer and supporting in research development and technology extension are mentioned as the policy recommendations in this study.