A mutually beneficial pact

Despite recent condemnation of Thailand's deportation of Uyghurs, the EU and the local government need to sign a trade deal to offset a protectionist US

On March 13, the European Parliament adopted a resolution condemning Thailand for deporting Uyghurs to China. Members also urged the European Commission to leverage ongoing free trade agreement (FTA) negotiations to press Thailand to reform its lese majeste laws, release political prisoners, and cease the deportation of Uyghurs.

Despite concerns, analysts and industry leaders believe this resolution may cause some delays in the FTA negotiations between Thailand and the European Union (EU), but it is unlikely to derail the process entirely.

THAI-EU FTA DELAYS
Somjai Phagaphasvivat, an independent political and economic analyst, said he believes the Uyghur issue may lead to delays in the Thai-EU FTA negotiations. However, he remains confident the EU will eventually sign the agreement based on mounting pressure from US President Donald Trump's trade policies, which have pushed both Thailand and the EU to expand their trade relations beyond the US.

Mr Somjai said the resolution condemning Thailand is not solely the result of the repatriation of Uyghurs to China. It also includes concerns over Thailand's failure to sign several key International Labour Organization agreements, demands for the release of political prisoners, pressure to terminate the Thailand-China extradition treaty, and calls for Thailand to allow human rights organisations to investigate domestic human rights issues.

He said negotiations for the Thai-EU FTA have progressed within the framework of the Partnership Cooperation Agreement, which is a crucial first step before formal FTA discussions. For the EU to finalise an FTA, it must receive approval from the Council of the EU, which consists of ministers from all EU member states.

The agreement must also be ratified by all 27 EU member countries.

Mr Somjai said he believes the EU's pressure on Thailand regarding human rights is largely symbolic, serving as a statement of its commitment to human rights principles. However, he considers some demands, such as the release of political prisoners, to be practically impossible for Thailand.

Despite these challenges, Mr Somjai remains optimistic the Thai-EU FTA will eventually reach an agreement because the context in Europe has changed with Trump's policies. Europe no longer views the US as an ally in the same way as before, he said.

The EU needs to build its independence by expanding trade cooperation with various countries, said Mr Somjai.

He gave the example of the EU's FTA negotiations with the Mercosur group (the Southern Common Market), which is an economic cooperation bloc in South America comprising Brazil, Argentina, Uruguay and Paraguay. The EU has been negotiating an FTA with Mercosur for more than 10 years, but still lacks an agreement because EU member states have not ratified it.

However, the pressure of Trump's recent policies has forced the EU to expedite signing this FTA because it is crucial for the union's survival, said Mr Somjai.

GREATER EFFORT NEEDED
Thitinan Pongsudhirak, professor and senior fellow of the Institute of Security and International Studies at Chulalongkorn University's Faculty of Political Science, said the Uyghur deportation is "unlikely to derail" the Thai-EU FTA.

"However, it could lead to a delay and require more effort from the Thai side to explain and justify the case," he told the Bangkok Post.

The Uyghur case needs to be considered alongside the European Parliament's statement that included concerns over the lese majeste law and the fate of 44 Move Forward Party members, said Prof Thitinan.

"If these non-trade and non-economic issues on rights and freedoms are set as pre-conditions, the Thai-EU FTA talks will go nowhere," he said.

Prof Thitinan also acknowledged the EU position is weaker than it used to be prior to Trump's second term.

"While Thailand needs to do much better on rights and freedoms, the EU also needs this FTA because of its interests and intentions in the Indo-Pacific region. FTAs are not just about trade, but broader geostrategic objectives," he said.

Prof Thitinan said Thailand should look to "match what Vietnam offered the EU". The EU-Vietnam FTA was signed on June 30, 2019 and the agreement became effective on Aug 1, 2020.

"If Vietnam can strike an FTA with the EU, then Thailand can do so as well," he said.

Meanwhile, Kuala Lumpur-based Maybank said if the US sets reciprocal tariffs solely based on the headline trade-weighted average tariff rate imposed on US goods, Thailand will be one of the nations in Southeast Asia most at risk.

Among regional economies, Thailand exports the most automobiles to the US in absolute terms. Even though the US market accounts for only 7% of its auto exports, excess supply from other exporters displaced from the blanket US duties on autos will be a major supply shock, Maybank said in a research note.

The solid recent export performance belies downside risks to export growth from the second quarter of 2025, noted the bank.

"We maintain our 2025 GDP growth forecast at 2.8% for now, but see significant downside risks to exports and private capital expenditure if Trump's reciprocal duties on Thailand and blanket auto tariffs materialise," said Maybank.

UNINTERRUPTED TALKS
The controversial Uyghur deportation should not affect Thailand's ongoing FTA talks with the EU, though the bloc always considers human rights issues in pacts, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).

He said he does not believe the EU will consider the Thai government's decision to send Uyghur detainees to China as a factor determining the outcome of negotiations.

Mr Kriengkrai said the Uyghur issue is the least relevant to the FTA talks, which focus on mutual economic gains between the two sides.

The EU is encountering an economic slowdown and it needs to seek new markets and business opportunities, he said. Signing the FTA with Thailand could be a tool to lift the European economy, said Mr Kriengkrai.

For its part, Thailand needs the FTA to support its exporters, according to the FTI.

"Our current situation is different from the past, when the military staged coups in Thailand, drawing heavy criticism from the international community," he said.

Mr Kriengkrai said it may be "unreasonable" if the Uyghur deportation becomes a key factor causing the EU to stall the FTA with Thailand.

"It is not easy to make a conclusion on Uyghur issues because it depends on the angle someone is looking at it from and what opinions they hold. If the Thai government had continued to confine the Uyghurs here, they would not have freedom nor the opportunity to reunite with their families in China," he said.

"Which one should be considered a human rights violation -- being confined in small rooms or getting out to resume normal living?"

NEGOTIATIONS ON TRACK
Chotima Iemsawasdikul, director-general of the Department of Trade Negotiations, said the FTA talks with the EU have begun, with the next round to be hosted by the EU between March 31 and April 4. There are no signs of any delay, she said.

According to the Commerce Ministry, the EU ranks as Thailand's fourth-largest trading partner after China, the US and Japan.

In 2024, trade between Thailand and the EU was valued at US$43.5 billion, representing 7.17% of Thailand's global trade. Thai exports to the EU amounted to $24.2 billion, while imports from the EU totalled copy9.3 billion, resulting in a trade surplus of $4.88 billion.

Major Thai exports to the EU include computers and components, gems and jewellery, air conditioners and parts, rubber products, automobiles and auto parts, transformers and components, electronic circuit boards, machinery and parts, motorcycles and parts, fax machines, phones and accessories.

Major imports from the EU are machinery and components, pharmaceutical products, aircraft and aviation equipment, chemicals, electrical machinery and components, medical instruments, electronic circuit boards, automotive components, miscellaneous items, plants and plant-based products.

Source: Bangkok Post