POTENTIAL IMPACT OF THE PROPOSED EU-THAILAND FTA ON THAI ORCHID EXPORTERS.

Abstract

This research examines the potential impact of the proposed Free Trade Agreement (FTA) between the European Union (EU) and Thailand on Thai orchid exporters to identify strengths and weaknesses of Thai orchid exporters and opportunities and threats ahead of them. It analyses Thai orchid exporters' perceptions towards the EU-Thailand FTA, focusing on advantages and disadvantages for Thai exporters. The opinions of Thai government officers and experts on the EU-Thailand FTA are considered as well. The research uses data collected from a survey of 96 Thai orchid exporters in the Bangkok Metropolitan Area and in-depth interviews with Thai government officers and experts, conducted from November 2012 to April 2013, supplemented with secondary data. Thai orchid exporters are found to have problems with internal and external factors such as lack of understanding about EU’s regulation and Non-Tariff Barriers (NTB), which were examined by SWOT analysis and Porter’s Five Forces. The main issues for Thai orchid exporters are NTB such as standards, regulations and trade document requirements, given that orchids are time perishable goods, combined with a lack of government support in production development. The results further reveal that Thai orchid exporters perceive the proposed EU-Thailand FTA to have a positive impact on exports of Thai cut orchids to EU markets. Possible benefits cited include the opportunity to increase sales due to lower tariffs and NTB, develop production technology and attract new investment. Hence, the potential benefits from the EU-Thailand FTA are perceived to help overcome some of the problems Thai cut orchid exporters are facing, especially if these are support by the Thai government through education, preparation and cooperation.