Trade Relations Between Vietnam and Thailand

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The leaders of Vietnam and Thailand met on the sidelines of the ASEAN-Japan summit last week to discuss ongoing trade relations between the two countries. Here’s what that trade looks like.

Prime Minister Chinh Minh Pham met with Thai Prime Minister Srettha Thavisin on the last week in Tokyo. The two leaders discussed the progress of the Vietnam-Thailand strategic cooperation relationship and committed to a action plan developed with respect to the implementation of the Vietnam-Thailand Enhanced Strategic Partnership for 2022-2027. The two leaders also said they wanted to bring bilateral trade to US$25 billion in trade turnover. In this respect, the Vietnam Briefing discusses where trade turnover between Vietnam and Thailand is currently at.

Trade rules and regulations between Thailand and Vietnam

Both active members of the Association of Southeast Asian Nations (ASEAN), the bulk of trade conducted between Vietnam and Thailand is governed by several intra-ASEAN free trade agreements.

ASEAN Free Trade Area Agreement (AFTA)

The is a multilateral free trade agreement among ASEAN countries. This agreement establishes the framework for gradually lowering tariffs to 0 to 5 percent and streamlining customs procedures between countries.

Regional Comprehensive Economic Partnership (RCEP)

The Regional Comprehensive Economic Partnership (RCEP) is aimed at strengthening ties between the ASEAN countries and Australia, New Zealand, China, Japan, and South Korea. It is one of the world’s biggest trading agreements with member states . The goal of the RCEP is to eliminate at in signatory nations within the next 20 years. In parallel, RCEP is intended to save traders money and time by allowing them to export goods to any signatory country under a collectively developed set of standards.

RCEP benefits for Thailand-Vietnam trade

Trade between Vietnam and Thailand appears to have benefited from in Vietnam on January 1, 2022. Despite the fact that the global economy has been facing several challenges, export turnover between Thailand and Vietnam hit in 2022. and Vietnam is Thailand’s second-largest ASEAN trading partner and fifth-largest trading partner globally.

Double Taxation Avoidance

The Double Taxation Avoidance Agreement between Vietnam and Thailand was signed on December 23, 1992, to avoid double taxation. In addition, this agreement also creates a legal framework for the tax authorities of the two countries to prevent tax evasion on income and assets.

The Promotion and Protection of Investments

Vietnam and Thailand signed a mutual investment promotion and protection agreement on November 30, 1991. is intended to establish better conditions for greater economic cooperation between the two countries. Especially for capital investment by citizens and companies of one country into the other. The agreement helps to increase investment initiatives in both countries. Specifically, , states that investors will be treated equally under the law.

Thailand FDI projects in Vietnam

Vietnam presently has 20 new projects with FDI from Thailand totaling US$394.95 as of July 2023. The majority of Thai projects in Vietnam are small to medium-sized. According to Praween Wirotpan, Chairman of the Thailand Chamber of Commerce, most of Thailand’s leading corporations have invested in Vietnam with projects in industries as varied as retail, petrochemicals, paper packaging, construction materials, animal and farm feed, and renewable energy.

Thailand’s exports to Vietnam

Thailand’s overall export value to Vietnam exceeded US$14 billion in 2022. Petroleum products; computers, electrical products, spare parts and components thereof; motor vehicles; parts and accessories of motor vehicles, and other products accounted for the bulk of these exports.

Thailand’s exports to Vietnam, 2022

Description Value (US$)
Fishery products 49,032,675
Milk and milk products 60,598,882
Fruits and vegetables 49,703,226
Maize (corn) 18,772,232
Animal, and vegetable fats and oils 82,877,441
Pastrycooks, sweets, and cereals products 74,231,318
Other edible food preparations 84,657,203
Animal fodders and animal fodder materials 137,500,027
Ores and other minerals product 52,827,795
Petroleum products 1,158,324,686
Liquefied petroleum gases (LPG) 34,161,957
Other petroleum products 159,138,241
Chemicals 562,605,294
Chemical products 398,905,778
Pharmaceutical materials 1,995,754
Pharmaceutical products 112,486,312
Fertilizers 3,709,614
Essential oils and resinoids; perfumery, cosmetic or toilet preparations 144,328,943
Insecticides, rodenticides, and materials 41,574,935
Plastics 964,463,778
Plastic products 288,371,933
Rubber 126,269,861
Rubber products 95,197,732
Wood and wooden products 142,123,819
Paper 168,077,061
Paper products 65,625,862
Yarn 117,448,716
Fabrics 324,257,714
Textile, leather, and foot-wear materials and auxiliaries 326,257,714
Glass and glassware 60,899,789
Precious stones, precious metals, and articles thereof 45,277,154
Iron and steel 140,326,015
Iron and steel products 157,611,177
Other base metals 635,471,757
Other base metal products 57,936,423
Computers, electrical products, spare parts, and components thereof 1,700,425,698
Electric consumer products and parts thereof 808,848,976
Still images, video cameras, and parts thereof 30,985,116
Machine, equipment, tools, and instruments 1,039,893,229
Insulated wires and cables 72,093,206
Motor vehicles 1,429,926,259
Parts and accessories of motor vehicles 1,009,746,524
Other products 1,056,738,341
Total 14,092,413,963

Computers, electrical products, spare parts, and components thereof

Consumption of electronic gadgets is expanding in Vietnam. In this light, Thailand supplied computers, electrical products, spare parts, and components thereof to Vietnam worth more than US$1.7 billion in 2022.

Motor vehicles; Parts and accessories of motor vehicles

of replacement parts and full vehicle items to Vietnam. IThis is partly attributable to a which sees all cars of ASEAN origin (with a localization rate of 40 percent or more) imported into Vietnam tax-exempt until the end of 2027. As a result, by the end of 2022, Thailand had exported over US$1.43 billion for motor vehicles and more than US$1 billion of parts and accessories of motor vehicles to Vietnam.

Petroleum products

Despite the fact that Vietnam extracts and exports crude oil, it still has to import petroleum to meet local demand. Thailand has become one of Vietnam’s biggest sources of petroleum products due to its proximity and the relatively low trade barriers due to several free trade agreements.

Vietnam’s exports to Thailand

Vietnam’s exports to Thailand are just over half of Thailand’s exports to Vietnam coming in at US$7.5 billion. One explanation for this trade deficit is that Thailand’s biggest retail businesses have recently engaged in mergers and acquisitions with retail chains in Vietnam. This has given Thai goods easier access to Vietnamese consumers. , is set to invest approximately US$1.45 billion in Vietnam over the next five years. , a firm owned by Thailand’s Chirathivat family, which purchased 49 percent of the shares in Nguyen Kim, a well-known electronics supermarket chain in Vietnam.
Description Value (US$)
Fishery products 331,624,770
Fruits and vegetables 168,055,205
Cashew nut 48,602,272
Coffee 76,559,664
Pepper 26,135,719
Pastrycooks, sweets, and cereals products 24,333,184
Animal fodders and animal fodder materials 34,748,616
Ores and other minerals product 555,864
Coal 27,807,858
Crude oil 880,474,002
Petroleum products 2,453,046
Chemicals 49,305,736
Chemical products 182,765,759
Fertilizers 21,350,610
Plastics 100,047,765
Plastic products 96,850,820
Rubber products 19,990,797
Handbags, purses, suit-cases, headgear and umbrellas 9,092,692
Wood and wooden products 69,332,588
Paper and paper products 112,847,769
Yarn 124,252,236
Textiles and garments 239,343,297
Tyre cord fabrics and other fabrics for technical uses 40,461,101
Foot-wears 69,089,502
Textile, leather, and foot-wear materials and auxiliaries 40,702,548
Ceramics products 33,291,352
Glass and glassware 7,838,238
Precious stones, precious metals, and articles thereof 4,067,886
Iron and steel 281,786,939
Iron and steel products 103,813,662
Other base metals and other base metal products 369,144,668
Computers, electrical products, spare parts, and components thereof 524,212,948
Telephones, mobile phones, and parts thereof 1,007,541,745
Machine, equipment, tools, and instruments 964,820,116
Insulated wires and cables 108,032,951
Other means of transportation, parts, and accessories thereof 636,756,366
Other products 638,118,509
Total 7,476,208,801

Crude oil

, Thailand is a country with a high demand for petrol with daily oil consumption exceeding 1.2 million barrels in 2022. It does, however, have limited oil reserves, accounting for less than 1 percent of the world’s total oil reserves, and therefore relies heavily on oil imports.

Vietnam–Thailand trade prospects

In recent years, commercial relations between Vietnam and Thailand have grown considerably. In 2022, when the global economy was experiencing a number of challenges, the two countries’ import-export turnover reached US$21.6 billion. Thailand is Vietnam’s largest trading partner in ASEAN and one of the country’s biggest foreign investors. Vietnam, on the other hand, is Thailand’s second-largest trading partner in ASEAN and fifth in the globe. With this strong and mutually beneficial partnership, trade relations between the two countries are expected to grow and advance even further moving forward. Thai investors can contact the experts at for assistance and more extensive information about investing in Vietnam.

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