The Business Year

Apiradi Tantraporn

THAILAND - Economy

Trading Nation

Minister of Commerce, Thailand

Bio

Apiradi Tantraporn is the Minister of Commerce of Thailand, having previously served as the Deputy Minister. Before that she was the Executive Chairperson of the International Institute for Asia-Pacific Studies at Bangkok University. Other positions have included Director General of the Department of Foreign Trade and Ambassador and Permanent Representative to the WTO. She has a strong academic background, having studied business administration at Thammasat University, later obtaining a master’s in international trade from Syracuse University in the US.

"We are looking in detail at what the TPP is, because we are, of course, part of the production chain and it would help us to remain in this chain."

The Ministry of Commerce recently announced that it expects exports to grow by 5% in 2016. Which macroeconomic factors will be crucial to realizing these goals?

The economic situation for 2016 is not bright. We are still in a fragile environment regarding oil prices. The Thai economy depends heavily on exports and over 60% of our exports are goods. We need to work hard to boost our exports. However, when looking at exports, we are not only looking at goods, because our economy is broad. We also export services, which is a growing segment. We are now looking at a two-pronged approach on our exports. This is why we are targeting this 5% figure. If you look at the economic situation that has made us aim for 5%, it is the growing market in the region. In particular, I am referring to ASEAN countries because 2016 is the year we are starting the ASEAN Economic Community (AEC), which has the potential to boost the Thai economy. We are in the heart of ASEAN, especially on the mainland, which is significant. If you look around the world, the AEC is a growing market, not only in terms of the region itself but also in terms of the access it offers us to neighboring markets such as India and China. We have those two countries with populations of over 1 billion each. Although China’s economy is slowing down, it still remains a growth area for us. This is because under our strategy, not only will we look at these countries as a whole, we will also dig deep into their major cities. When talking about the AEC, Thailand is in a strategic location with unrivalled access to the booming Cambodia, Laos, Myanmar, and Vietnam (CLMV) markets. In 2016, we will have an important road and rail link to China through Laos and Thailand. Another two important links will go from Vietnam to Myanmar and also from Thailand through Myanmar to India. These are important aspects when we analyze the future prospects for Thailand.

In what ways can the Ministry help exporters establish themselves in both well established and emerging markets?

Emerging markets are particularly important for us. We have to separate the two types of markets and look specifically at how we bring people into new emerging markets. For example, I recently returned from a trip to Iran and Oman. Oman is a small country, but it is a member of the emerging GCC bloc and can be a link to the East African countries, and Iran has just opened up following the decades-long sanctions. Iran is a large market and it could also be a link to the CIS. Even big business in Thailand does not have the know-how to access such markets, especially Iran. On our trip we found out that both sides are enthusiastic about each other. Thai business understands now, just from that trip, the opportunities in Iran. Iran is looking for partnerships and Thailand is a good fit in that sense. This is the time to bring our businesses to the new emerging economies. We still have to keep the traditional markets in the US and the EU, although the EU is slowing down. There are also the niche markets where we try to adapt our business, products, and services to suit each market. I am going to Belarus soon, which is also a new market for Thai businesses, and then to Turkey for the launch of our FTA. African countries also offer significant potential for Thailand. Of course, in countries that depend on oil their purchasing power may have slowed down; however, they still need products from Thailand as we have a variety of resources that can match their needs.

With so many agreements and FTAs on the table, does Thailand need the Trans-Pacific Partnership (TPP)?

It does not hurt to be part of these agreements. We are looking in detail at what the TPP is, because we are, of course, part of the production chain and it would help us to remain in this chain. Therefore, we are studying the TPP in depth; however, as a new member we know that the 12 original members will look at Thailand and ask what they can get from us. If the price is too high then we cannot enter, but we hope we can get support from our friends in the TPP and we can learn from them; for example, from Vietnam and Malaysia, whose level of development is close to ours. We can learn how they adapted and prepared themselves to be part of that huge agreement. We can learn from many other friends and colleagues in other countries who can share their experiences with us. But yes, it is important to be part of the TPP as a trading partner. Intellectual property has been an issue for us, but it is the same for every country in the TPP. That is another area where we can learn from our friends. I do not believe we are in a worse situation than many countries that are partners in the TPP. At the same time, we have been improving on intellectual property rights (IPR) issues. Registration has been a main issue and that has been promoted during the last two years in office. The enforcement has been stepped up and we have been working on improving many issues because we cannot stay put. Even though we are not part of the agreement, we are a trading nation in a trading world. We have new investment opportunities, such as in high technology and R&D where we are luring foreign investment into Thailand. In that sense, we have been moving up the scale, even though we are not a member of the TPP.

E-commerce in the region is gaining momentum. In what ways has the Ministry of Commerce adapted to this game-changing phenomenon?

E-commerce will be a major element of our export growth. A large percentage of retail, particularly in China, is through e-commerce and this sector is growing fast. We are encouraging businesses and entrepreneurs to make use of e-commerce. We have a department that is nurturing this growth, which we call the Incubator. We have a program to train and develop e-commerce enterprises and, when they are stronger, we partner them with bigger businesses. We are looking to develop this program in three steps. Firstly, for those who have never been involved in e-commerce before, we have the incubator programs. Then, we partner them with mega-business locally to mentor them and help them manage their stock, payment, and delivery systems. For example, the Central Group has trading companies in Indonesia, Vietnam, and elsewhere in the region, and it will connect these new SMEs with its overseas outlets. Our International Trade Department has another project promoting design that is partnered with Japan. Many of the companies that have won that competition have been able to export to Japan. We hold the Prime Minister’s Design Awards every year. We take the winners out to exhibitions and promote them in various ways. In 2016, we will not only participate in trade fairs abroad and bring buyers into the country, we will also have a high-level road show going to numerous countries around the world. This road show will include both our SMEs and big business. We are also putting more emphasis on investment abroad. Our bigger businesses are active in outward investment already; for example, the CP Group has gone into Russia and many other countries. Our smaller businesses need to have guidance for outward investments. I think that Thai businesses are quite ready for this.

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