Economic experts have been lowering their expectations on Thailand's expansion this year and concerns about how the country could overcome the decline of its economy are on the rise.
Analysts believe the Thai government should focus on getting its European Union (EU) deal to have a better shot at growth.
The EU accounts for around 10 percent of Thailand's car exports and industry experts believe there is a huge opportunity for the taking if the government wants these figures to grow in the coming years.
The Thai government has yet to bag a trade deal with the EU that ensures benefits for both parties. While several ASEAN member nations have already secured trade agreements with the bloc, Thailand has yet to present a proposal that the western bloc will find interesting enough for investments and business partnerships.
After Vietnam secured a free trade deal (FTA) with the bloc, economists noted that Thailand's exchange channels to the EU now have more risks than before. All of the country's exports to the bloc are still subject to tax duties since no FTA is on the table yet.
Thailand's Trade Policy and Strategy Office reportedly fears that due to the Vietnam-EU FTA, many European carmakers will move operations to Vietnam instead, putting Thai operations at risk of losing their few exchange networks with the bloc.
It's not just car exports and segments that could be affected by the Vietnam-EU deal. The Office warned that even textiles, jewelry, electric components, tech parts, and even some agriculture products, could be affected by the agreement.
Despite these fears, many Thai economists believe that the EU may soon reach out to Thailand since the bloc wants to penetrate the country's key sectors such as alcoholic beverages and healthcare segments.
The Thai government is now being urged to open its market to the European Union if it wants to quench fears about how the Vietnam-EU trade will affect Thailand's business circles.
Some economic experts are bothered that despite the announcement earlier in June that Thailand is eager to resume trade talks with the European Union, Vietnam came in first in bagging a massive deal.
At that time, it was revealed that delegations from the Thai government and the European Commission will meet to discuss a potential trade agreement. Details could not be revealed since the country was building its new government when the trade talks reportedly resumed.
Thailand's growth is being held back by multiple internal headwinds such as political issues and a foreign policy that has yet to be opened further to the global market.