After four rounds of negotiations, Bhutan and Thailand signed the Free Trade Agreement today. The agreement allows the two countries to trade goods without paying customs duties on each other’s products. A customs duty is the tax imposed on imported goods. Thailand is the fourth largest trading partner of Bhutan.
Ahead of the Sixth BIMSTEC Summit, which starts tomorrow, Industry, Commerce, and Employment Minister Namgyal Dorji and Thailand’s Minister of Commerce Pichai Naripthaphan signed the Free Trade Agreement.
The signing ceremony took place in the presence of Prime Minister Tshering Tobgay and Thailand’s Prime Minister Paetongtarn Shinawatra at the Government House in Bangkok.
The agreement will exempt customs duty and provide duty-free market access to the Thai market for Bhutanese products.
Bhutan currently exports Cordyceps and agricultural produce such as vegetables, fruits and spices to Thailand. Currently, Bhutanese goods are subject to customs duty ranging from 5 per cent to 60 per cent when exported to Thailand.
Meanwhile, as per the Customs Duty Act of Bhutan 2021, most goods imported from third countries, including Thailand into Bhutan, are levied 10 per cent customs duty.
Bhutan imports goods such as automatic data processing units, ovens, cookers, smartphones, medical equipment and appliances, among others, from Thailand.
However, other taxes, such as Goods and Services Tax and Value-Added Tax, will continue to be imposed on goods in both countries according to their respective national regulations.
The government expects that the agreement will allow seamless bilateral trade and deepen economic ties.
The agreement must be ratified by Parliament before it can be implemented. The government plans to present the agreement for ratification later this year.
Last year alone, the trade between the two countries accounted for USD 31 M.
Pema Tshewang, Thailand
Edited by Sangay Chezom
