Damon Mcknight
Australia and Thailand have a substantial commercial relationship, with two-way trade in goods and services valued at approximately $33.7 billion in 2023-24. This makes Thailand Australia's second-largest trading partner among Southeast Asian countries and its ninth-largest trading partner overall. The two countries have longstanding and deep connections, with formal diplomatic relations established in 1952. The Thailand-Australia Free Trade Agreement (TAFTA) came into effect on 1 January 2005 and has since tripled two-way trade.
| Characteristics | Values |
|---|---|
| Nature of the trade agreement | Thailand-Australia Free Trade Agreement (TAFTA) |
| Date of enforcement | 1 January 2005 |
| Trade volume in 2023-24 | $33.7 billion |
| Thailand's exports to Australia in 2023-24 | Delivery trucks ($8.6 billion), passenger motor vehicles ($3 billion), and heating and cooling equipment ($1 billion) |
| Australia's exports to Thailand in 2023-24 | Natural gas ($1.5 billion), crude petroleum ($1.3 billion), and coal ($589 million) |
| Thai investment in Australia in 2023 | $9.3 billion in renewable energy, agri-business, and hospitality sectors |
| Australia's exports to Thailand in 2009 | Services ($790 million), including travel ($641 million), transportation ($114 million), and other business services ($23 million) |
| Australia's exports to Thailand in 2023 | Goods ($6.71 billion) |
| Thailand's exports to Australia in 2023 | Goods ($13.5 billion) |
| Australia's ranking as Thailand's trading partner in Southeast Asia | 2nd largest |
| Australia's ranking as Thailand's overall trading partner | 9th largest |
| Australia-Thailand diplomatic relations | Established in 1952 |
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What You'll Learn
The Thailand-Australia Free Trade Agreement (TAFTA)
Australia and Thailand have a robust trade relationship, with total two-way trade more than doubling since the implementation of the Thailand-Australia Free Trade Agreement (TAFTA). This agreement entered into force on 1 January 2005 and was a significant milestone in bilateral trade between the two nations.
TAFTA is one of three Free Trade Agreements (FTAs) that Australian businesses can utilise to trade with Thailand. The agreement has eliminated the majority of Thai tariffs on goods imported from Australia, reducing previously high tariff barriers of up to 200%. This has opened up a range of export opportunities for Australian businesses in Southeast Asia's second-largest economy. As of 2010, 94% of Thailand's tariff and quota barriers on imports from Australia had been eliminated, with the remaining tariffs phased out by 2015 or 2020, except for certain dairy products, which will be eliminated in 2025.
The agreement also improves the environment for bilateral services trade and investment. Australian companies now have more open access to Thailand's services market, and there is a commitment to liberalise two-way services trade in the future. Additionally, Australian investors have increased access to the Thai market, with the agreement permitting majority Australian ownership in various sectors, including mining operations, construction services, restaurants, hotels, tertiary education institutions, and maritime cargo services.
In 2023, Thailand exported $13.5 billion worth of goods to Australia, including delivery trucks, cars, and air conditioners. Over the past five years, Thailand's exports to Australia have grown at an annualised rate of 3.29%. During the same period, Australia exported $6.71 billion worth of goods to Thailand, primarily petroleum gas, crude petroleum, and wheat. Australia's exports to Thailand have increased at an annualised rate of 2.28% over the last five years.
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Australia's exports to Thailand
Australia and Thailand have longstanding and deep connections, with formal diplomatic relations established in 1952. The two countries have a strong trade relationship, with Thailand being Australia's 2nd largest trading partner among Southeast Asian countries and 9th largest overall in 2023-24.
The Thailand-Australia Free Trade Agreement (TAFTA) has been in force since 1 January 2005 and has significantly reduced tariff barriers for Australian businesses, opening up a range of export opportunities. As a result, two-way trade between the countries has more than doubled, with Australian exports to Thailand increasing at an annualized rate of 2.28% over the past 5 years, reaching $6.71 billion in 2023.
Australia's key exports to Thailand include natural gas, crude petroleum, coal, wheat, and mineral products. In 2023, natural gas exports to Thailand were valued at $1.5 billion, crude petroleum at $1.3 billion, and coal at $589 million. Wheat exports to Thailand were valued at $575 million in the same year. Australia also had a large net trade with Thailand in mineral products, exporting $3.92 billion worth of these products in 2018.
In addition to goods, Australia also exports services to Thailand. In 2009, Australia exported services worth $790 million, with travel, transportation, and other business services being the largest components.
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Thailand's exports to Australia
Australia and Thailand have a long history of diplomatic relations, dating back to 1952. The two countries have strong economic ties, with Thailand being Australia's 2nd largest trading partner among Southeast Asian countries and its 9th largest overall in 2023-24.
The Thailand-Australia Free Trade Agreement (TAFTA) has been instrumental in enhancing bilateral trade. TAFTA, which came into force on 1 January 2005, is one of two or three FTAs that Australian businesses can use to trade with Thailand. TAFTA has significantly reduced tariff barriers, with Thailand eliminating 94% of its tariffs and quotas on imports from Australia by 2010. This has opened up a range of export opportunities for Australian businesses in Southeast Asia's second-largest economy.
In 2023-24, Thailand's key exports to Australia included goods vehicles ($8.6 billion), passenger motor vehicles ($3 billion), and heating and cooling equipment ($1 billion). Over 3,000 Australian companies export to Thailand, and around 200 of these companies have a physical in-country presence.
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Two-way trade
Australia and Thailand have a history of trade relations, with the Thailand-Australia Free Trade Agreement (TAFTA) being in force since 2005. This agreement has facilitated the elimination of tariff and quota barriers, improved market access, and increased trade and investment opportunities for businesses in both countries.
In 2023, Thailand exported $13.5 billion worth of goods to Australia, including delivery trucks ($5.59 billion), cars ($1.61 billion), and air conditioners ($957 million). Over the past five years, Thailand's exports to Australia have grown at an annualized rate of 3.29%.
On the other hand, Australia exported $6.71 billion worth of goods to Thailand in 2023. The primary exports included petroleum gas ($2.22 billion), crude petroleum ($1.16 billion), and wheat ($575 million). Australia's exports to Thailand have also been increasing, with an annualized growth rate of 2.28% over the last five years.
The two-way trade in goods and services between Australia and Thailand has more than doubled since the implementation of TAFTA. As of 2015, the total two-way trade was valued at over A$20.8 billion. Thailand is a significant market for Australian aluminium, metal, and coal. Additionally, Thailand is a popular tourist destination for Australians, with approximately 400,000 Australian visitors each year.
Both countries were founding members of the Asia-Pacific Economic Cooperation (APEC) in 1989 and have continued to strengthen their economic and diplomatic ties through various agreements and partnerships.
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Trade barriers
Australia and Thailand have a strong trading relationship, with total two-way trade more than doubling since the implementation of the Thailand-Australia Free Trade Agreement (TAFTA) in 2005. TAFTA has eliminated the majority of Thai tariff barriers on goods imported from Australia, reducing previously high tariff barriers of up to 200%. This has opened up a range of export opportunities for Australian businesses.
However, some trade barriers still exist between the two countries. While 94% of Thailand's tariff and quota barriers on imports from Australia were eliminated as of 2010, with the remaining tariffs phased out by 2015 or 2020, certain exceptions remain. For instance, tariff rate quotas on skim milk powder, liquid milk, and cream will not be eliminated until 2025.
Non-tariff barriers also impede trade between Australia and Thailand. These include licensing, labelling requirements, and localization barriers. In addition, Thailand's complex tax structure, including price controls and excise taxes, can negatively affect international trade.
Another trade barrier is Thailand's absence as a signatory to the WTO Agreement on Government Procurement. This absence can create challenges for Australian businesses seeking to navigate government procurement processes in Thailand.
Despite these barriers, the overall trend in trade between Australia and Thailand has been positive, with increasing trade volumes and expanding opportunities for businesses in both countries.
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Frequently asked questions
Yes, the Thailand-Australia Free Trade Agreement (TAFTA) came into effect on 1 January 2005.
In 2023, Thailand exported $13.5 billion worth of goods to Australia, while Australia exported $6.71 billion worth of goods to Thailand. This made Thailand Australia's second-largest trading partner among Southeast Asian countries and ninth largest overall.
In 2023, Thailand's key exports to Australia were delivery trucks ($5.59 billion), cars ($1.61 billion), and air conditioners ($957 million).
In 2023-24, Australia's key exports to Thailand included natural gas ($1.5 billion), crude petroleum ($1.16 billion), and coal ($589 million).
Australia and Thailand have longstanding and deep connections, with formal diplomatic relations established in 1952. In 2020, the bilateral relationship was elevated to a Strategic Partnership, demonstrating a commitment to broaden and deepen cooperation.
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