Thailand and Bhutan have successfully concluded negotiations for a Free Trade Agreement (“FTA”), marking a significant milestone in their bilateral relations. The final round of discussions took place in Bangkok from February 17 to 19, 2025, culminating nine months of intensive negotiations.
Key Provisions of the FTA
The agreement encompasses several critical areas:
- Trade in Goods: Both nations have agreed to grant high-level market access, effectively eliminating tariffs on nearly all traded goods. This move is anticipated to boost the exchange of products such as vehicles, agricultural commodities, processed foods, textiles, chemicals, and electrical appliances.
- Economic Cooperation: The FTA outlines collaborative efforts in sectors including tourism, agriculture, education, vocational training, and renewable energy. These initiatives aim to foster sustainable development and mutual economic growth.
Legal and Economic Implications
The Thailand-Bhutan FTA, upon its ratification, will be Thailand’s 17th trade agreement, highlighting its commitment to expanding its international trade network. The FTA will provide Bhutan with duty-free access to Thailand’s market of 70 million consumers, enabling Bhutan to diversify its export destinations. The agreement aims to streamline trade flows, reduce bureaucratic barriers, and improve regulatory cooperation, benefiting businesses in both countries through simplified customs procedures and better market access. The formal signing is set for April 2–4, 2025, during the BIMSTEC Leaders’ Summit hosted by Thailand. Prior to this, stakeholder consultations will be held in March to ensure the FTA’s provisions align with all interests. Overall, the FTA is expected to strengthen bilateral economic ties, promote legal harmonization, and provide economic benefits to businesses and consumers in both nations.