Today – for the first time in 15 years – the UK’s Trade Minister touched down in Bangkok to strengthen trade links between the UK and South East Asia’s second largest economy.
As we hurtle towards Brexit – with just 359 days left – boosting exports outside the EU is a no.1 priority for many.
Bilateral trade between Thailand and the UK increased by 2.8% between 2015 and 2016 and – with the UKEF announcing today that it will double the finance available for British businesses exporting to Thailand to £4.5 billion – this can only be set to increase.
Siddharth Shanker, CEO of Tail’s Trading – which already partners 250 British SMEs to source British products to sell in the Asian market. Reviewing the significance of today’s visit and of the opportunities and pitfalls for businesses to watch out for when setting out to export to Asia, Siddharth concluded:
Significance of Visit:
- First UK trade minister to visit under the new king (and in 15 years).
- Thailand’s “Look west” policy since 1996
- The visit comes at the time of uncertainty in the UK due to Brexit.
- Thailand is an important port in SE Asia for trade and economic activities.
- Thailand enjoys a good relationship with almost all Asian countries, hence is not subject to high taxation when exporting.
Opportunities for the UK:
- Economic development is top priority for Thailand.
- Eastern Economic Corridor project and other large infrastructure projects provide an opportunity for British brands to access the east.
- A strong and growing middle class in Thailand
- A strong and cost effective infrastructure for warehousing and logistics for British goods.
- A strong and cost effective manufacturing infrastructure.
- A fully developed infrastructure for tourists.
- Rising interest and disposable income of the Thai population in Golf, whisky etc.
Things to be careful of:
- US currently exports goods worth USD 13 Billion per annum to Thailand. Creating a market and space for British “high volume” products is a challenge.
- Given Thailand’s strong economic ties with China, trade and investment opportunities will be subject to competition.
- China’s economic and military ties with Thailand will influence its decision making process.
- It has been observed in the past in Asia, that an economically developing society with a rising middle class generally pushes for a democratic government rather than an Authoritarian. E.g. South Korea, Taiwan.
- Taxation and government policies not clear for foreign companies.
- Threats UK manufacturing sector jobs as manufacturing in Thailand is cheaper than UK.
- The problem of duplicity of products and brands (intellectual property) remains an unanswered issue in Asia.
