The Factor Affecting Thailand And CLMV Countries’ Trade Volume And The Influence Of Thailand’s ACMECS Policy On CLMV Trade Performance

Currently,Thailand has taken strong action to revitalize the ACMECS policy in a covert effort to increase its political and economic power in its CLMV neighborhood.In this regard,Thailand regulations have promoted border businesses that may take advantage of CLMV’s location to achieve these objectives.Nevertheless,there are few specialized research on Thailand and CLMV trade concerns,and the majority of studies tend to be primarily geopolitically focused.Also,since ACMECS has prioritized cross-border trade,it is necessary to examine it in depth.This study investigates the key factors that affect the value of exports,imports and total trade volume of Thailand and CLMV members(Cambodia,Laos PDR,Myanmar and Vietnam).The gravity model is employed to assess bilateral trade between Thailand and CLMV using yearly data from 2003 to 2021 and panel data.The study discovers that an increase in the real GDP(Gross Domestic Product),population,and political stability of CLMV trading partners leads to an increase in Thailand and CLMV export value,import value,and overall trade.However,as the distance between Thailand and CLMV trading countries increases,the total exports,total imports,and total trade value move in the opposite direction.The common language has little effect on raising the value of Thailand and CLMV exports,imports,and total trade volume.Consistent with the principle of gravity,the sharing of a border leads the exports of Thailand and its neighbors to increase,while the imports and overall trade of Thailand and CLMV shrink.All of these findings can aid the government and policymakers in implementing appropriate steps to enhance the performance of Thailand and CLMV foreign trade.Meanwhile,this paper also investigates the impact of ACMECS policy on Thailand’s trade and connectivity in CLMV nations following its implementation,utilizing the DID(Difference-in-Difference)model.The study has found out that after the implementation of the policy,ACMECS has significantly increased the GDP of CLMV countries,in which Thailand imports more from CLMV members and CLMV countries can export more products to Thailand.CLMV economy stability would support subregional prosperity in the long run.Consequently,the ACMECS strategy will benefit not only the four member states,but also ASEAN and its solidarity.