Thailand and Australia

Official diplomatic Australia-Thailand relations were established between Australia and Thailand in 1952. Today relations between Australia and Thailand are represented in several most important spheres: trade, business, national defence, investments and tourism.

Trade interactions play an important role in Australia-Thailand relationship. In the world rating of trading partners, Thailand and Australia enter the top 10. For example, mutual retail trade flow made more than 12 billion Australian dollars in 2007. Australia is one of the main suppliers of mineral resources to Thailand; it exports aluminium, copper, refined lead, zinc, ores, concentrates and thermal coal. On the other hand, for Thailand Australia is also the biggest export market, making annually up to 1,600 million Australian dollars (A Quarterly Review of Australia’s International Trade 2008). Besides, Australia is the only country, with which Thailand has endorsed an inclusive agreement on free trade (TAFTA).

TAFTA came into force on January, 1, 2005 and acts till January, 1, 2010. High tariff barriers were decreased; and so export became possible for a wide range of production. The Agreement contributes to the rise of trade flows and investments between countries, to the improvement of business mobility and transparency; it encourages bilateral collaboration in different spheres starting from customs measures and policy concerning competition, up to general governmental policy (Dent 006).

Thailand and Australian Government also cooperate in the sphere of national security. First, two countries have signed a two-sided agreement on counter-terrorism and defence measures. Secondly, the armed forces of Australia and Thailand take part in organized joint trainings and education; exchange programs and annual visits.

In addition, for Australia Thailand is a substantial tourist market. Australia is the tenth country in the rating of Thailand tourists. More than 400 thousand Australians annually visit Thailand. On the other hand, Australia has arranged a Work and Holiday Visas agreement with Thailand, making by this an exception for a developing country for the first time (Doner 2009).

Apart from tourism reasons, the countries cooperate in the sphere of medicine, education, labour force, and restaurant business.

Among Thailand student, searching for an education establishment abroad, Australia is the dominant choice. The number of students reaches 15 thousand. Besides, Australia is also a preferable alternative for immigrants from Thailand, making about 35 thousand people. In their turn, Australians are ranked as the 6th biggest group of Thailand visitors, entering the country for medical treatment. Besides, Australia contains the largest number of Thai restaurants abroad; the general figure makes more than 800 restaurants (Doner 2009).

By these reasons, the aviation market between Australia and Thailand is the 6th largest in Australia. Thailand airways conduct up to 30 flights weekly to the biggest Australian cities (Sydney, Melbourne, Brisbane, etc), which are nearly the most frequent flights for Thai airways (A Quarterly Review of Australia’s International Trade 2008).

However, in the times of economic crisis, East Asia and the Pacific region are most likely to experience the influence of a decline in the international investment and trade, which restricts industrial production and reduces capital costs.

In 2008, investments made 36,3% of GDP, comparing with 26,5% for developing countries. As a result, the capital expenditure reduce is likely to have proportionately greater impact on regional growth. The growth of regional exports by 15% and 10% in 2007 and 2008 respectively changed to decline by 1% in 2009. On this background, GDP in 2009 decreases up to 5,3%, while several member countries of ASEAN, including Thailand, enter into recession (Doner 2009). Thus, in foreign policy, the Thai Government should continue to implement a range of measures aimed at improving the competitiveness of Thai products in world markets, stimulating the upgrade of production, improving product quality, development of local exporters of new markets.

One of the top-priority tasks in the contemporary conditions is to attract investments to the country, which should be organized on state policy level and be considered by the highest echelon of Thai leadership. First of all, investments should be attracted in the least developed areas, particularly in most remote provinces.

Here, the Thai Board of Investment could play a significant role in the economic development and be an effective tool in the hands of the government in the formation and implementation of the investment policy with the participation of capital of both local private and public companies and organizations, both domestic and foreign companies. Creating favorable conditions for development of certain industries, the general investment environment should be formed in Thailand, which could generally meet the requirements for solving economic and social problems of the Thai Government. Besides, the terms of the Investment Promotion Act should be controlled and regulated transparently, while it provides guarantees of the Thai Government concerning the protection of the rights of foreign investors.

General state strategy should include the following objectives: free trade provision in accordance with the international trade and economic agreements, protection of the national trade interests, further development of foreign trade agreements and negotiations, strengthening the role of the private sector in developing and implementing an effective foreign trade strategy. Sub-regional economical cooperation should be based on infrastructure development aimed at expanding trade and investment, reducing “soft” infrastructure impediments to trade and investment, and at job creation.



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