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The European Union and Thailand Conclude Partnership and Cooperation Agreement
Kind: ICD What's New  Organization: Department of International Cooperation  Publish Date: 2022-11-01 16:20
The European Union and Thailand finalized the text of the EU-Thailand Partnership and Cooperation Agreement (PCA) in September this year. Thailand is the sixth ASEAN partner to finalize negotiations for a PCA with the EU following Indonesia, Vietnam, the Philippines, Singapore and most recently, Malaysia. "The Agreement will give EU-Thailand relations a new legal foundation, which is more comprehensive and up-to-date and will respond better to current challenges," said by the European External Action Service (EEAS), responsible for the EU's foreign and defense policies, in an announcement.

The PCA will enhance the political dialogue between the EU and Thailand on issues of global concern, and will give more scope for mutually-beneficial cooperation in a wide number of policy areas, including environment, energy, climate change, transport, science and technology, trade, employment and social affairs, human rights, education, agriculture, non-proliferation, counter-terrorism, the fight against corruption and organized crime, migration and culture. It will be a roadmap to enhance EU-Thailand relations in the years to come.

Bilateral trade in goods between the EU and Thailand increased to 35.4 billion euros ($35.16 billion) in 2021, up from 29.3 billion euros in 2020, according to the EU data. The EU is Thailand's fourth largest trade partner (after China, Japan and the US), accounting for 7.5% of the country's total trade, while Thailand is the EU's 26th largest trading partner worldwide. Thailand is one of the most important destinations of European investments within ASEAN, with 19.8 billion euros of outward stocks; the EU is the second largest investor in Thailand, only after Japan.

The agreement makes sense for both sides, noted by analysts. It would signal a boost to relations from both sides as they both are more willing and eager to work with one another to diversify sources of growth and investment. For Thailand, long reliant on its tourism industry, the decline of Chinese visitors since the pandemic has forced it to rethink its dependence on Beijing and find other sources of growth. Meanwhile, the EU also seeks to diversify from China as geopolitical risks rise and as Brussels increasingly views Beijing as competitor.

The PCA's conclusion may also indicate that both sides are inching closer toward a free trade agreement (FTA), which would be the third the EU has struck with a Southeast Asian country after landmark deals with Singapore and Vietnam. One lead analyst for Thailand at the Economist Intelligence estimates the FTA between the EU and Thailand would be signed between 2024 and 2026 unless some politic issues arise.

A partnership and cooperation agreements (PCA) is a legally binding agreement between the EU and third countries. It is one of three special types of international agreements. By means of a PCA, the EU works to support the democratic and economic development of a country. The validity of a PCA is typically for ten years, after which it is automatically extended each year provided no objections are raised.


Update: 2020-04-23
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