Thailand and Bhutan have commenced negotiations for a free trade agreement (FTA), targeting completion by next year. Deputy Commerce Minister Napintorn Srisunpang announced that Bhutanese Prime Minister Tshering Tobgay signed the terms of reference to initiate these negotiations.
Both nations regard the FTA as a crucial mechanism to enhance bilateral trade and investment, reduce trade barriers, and provide better market access, particularly for agricultural products, with a goal to achieve $20 million in trade by 2025.
In addition to the FTA discussions, the two countries explored Bhutan's ambitious development project, the "Mindfulness City," near Gelephu on Bhutan's southern border with India. The city is envisioned as an economic hub and tourist gateway featuring low to mid-rise buildings and inhabitable bridges housing key infrastructure such as an international airport, university, hydroponic greenhouse, cultural center, spiritual center, local goods market, and hydroelectric dam.
Mr. Napintorn emphasized that this project could serve as an economic corridor connecting South Asia with Southeast Asia through India's northeastern region, presenting opportunities for Thai businesses to partner in its development. The Thai side has requested further information on business incentives and regulations related to investment in the project.
Thailand and Bhutan share close bonds of friendship rooted in their common Buddhist heritage and strong relations across various levels, including economic cooperation in agriculture, tourism, investment, and handicrafts. Many Bhutanese tourists visit Thailand for health and wellness services, and Bhutan has expressed interest in participating in a tourism festival in Thailand to promote its culture and tourism.
Thailand praised Bhutan's continued economic development, noting its exit from the list of least developed countries in December 2023. King Jigme Khesar Namgyel Wangchuck's vision aims to transform Bhutan into a South Asian economic hub, with aspirations to become a high-income country by 2034.
Chotima Iemsawasdikul, director-general of the Trade Negotiations Department, stated that the first round of negotiations, held on May 17 in Thimphu, Bhutan, finalized the FTA structure and outline, identified working groups and focal points, and agreed on a work plan. The next round of negotiations will be hosted by Thailand in August, with the agreement expected to be completed by November 2025.
Once the FTA is implemented, it will eliminate tariffs and non-tariff barriers, enhancing the competitiveness of export products such as dry fruits, garments, rubber and plastic products, and electronic appliances. Trade between Thailand and Bhutan has grown steadily, with total trade in goods reaching $8.7 million in 2023. In the first three months of 2024, two-way trade amounted to $3.06 million, with exports valued at $3.03 million and imports at $30,000. Key exports include computers, textiles, wheat, electrical appliances, and ready-to-eat food, while key imports include aviation equipment, metal products, and fine arts.
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