Higher trade with Korea requires govt actions
IF IT hopes to achieve a 5 per cent growth in bilateral trade between Thailand and South Korea, the Kingdom’s incoming government must continue to deregulate laws that obstruct the ease of doing business.
The government also needs to improve communication with Korean companies, emphasised Kwon Pyung-oh, president and chief executive officer of the Korea Trade and Investment Promotion Agency (KOTRA), speaking at a trade fair on Friday.
KOTRA has set the target of a 5 per cent increase in Thai-Korea trade for 2019, through holding various events and projects such as the Korean Brands and Entertainment Expo (KBEE), which was held last Friday.
However, in the first quarter of this year, Thai-Korea trade declined by 1.14 per cent, or US$4.47 billion (Bt140.22 billion) over the same period as last year. Thailand exported $1.57 billion (Bt49.25 billion) worth of goods to South Korea, a 4.13 per cent contraction year over year, according to the Thai Commerce Ministry.
The trade volume between the two countries achieved a record high in 2011 at $13.8 billion according to the Commerce Ministry.
“But after four consecutive years of decline due to political instability in Thailand and natural disasters, Thai-Korea trade started to recover again from 2016 to the present,” said Kwon in an interview with The Nation.
In 2018, Thai-Korea trade reached $13.7 billion in value, almost topping the record value in 2011, according to the Thai Commerce Ministry.
As soon as the new government of Thailand was inaugurated and economic policies become visible, Kwon said, business predictability will be improved and that would have a positive impact on trade and investment sentiment between the two countries.
Korean companies have been voicing their complaints that Thailand presents a variety of regulatory challenges to operating here, and this affects trade and investment, Kwon claimed, declining to elaborate on any specific regulation.
The Thai government should also establish closer communication with Korean companies, especially those that are exporting to Thailand or are currently located in the Eastern Economic Corridor (EEC), he said.
Currently, there are 400 Korean companies in Thailand, many of which are located in the EEC. Of these companies, 210 are in the manufacturing sector, according to the KOTRA president.
“KOTRA will cooperate with the Thailand Board of Investment (BOI) and the EEC Office to increase the number of Korean companies interested in Thailand,” Kwon continued. “However, there are still many Korean companies that do not know much about the business potential in Thailand – especially Korean startups, which are on the rise.”
Kwon called on the Thai government to step up its publicity efforts and communicate more with Korean companies in order to attract increased investment into the EEC.
He said that thus far neither trade nor investment between the |two countries was as high as it should be.
While the US-China trade conflict presents a risk factor for both Korean and Thai companies, Kwon remained optimistic.
He highlighted the possibility of diverting investment to Thailand, as many Korean companies producing in China may start to relocate their production bases to the Kingdom.
