Thailand is a middle-income country with mature urban markets. Competition is intense among strong major Thai conglomerates and strong multinational brands from around the world. Customers are brand-aware, value-driven, and open to trying new products, making loyalty difficult to maintain. Simultaneously, Thai consumers are price-conscious and generally served by local suppliers and low-priced imports. U.S. exporters with products that are competitive for reasons other than price should consider working with a local partner as part of your market-entry strategy.

Thailand’s high tariffs are significant impediments for U.S. agricultural exports, particularly for consumer-oriented products like dairy products, meats, fresh fruit, snack foods, processed vegetables, and pet foods. The average Most-Favored-Nation (MFN) applied tariff rate was 9.8 percent in 2023 (latest data available).  Thailand’s average MFN applied tariff rate was 27.0 percent for agricultural products and 7.1 percent for non-agricultural products in 2023 (latest data available).  Thailand has bound 76.9 percent of its tariff lines in the World Trade.

Thailand’s high tariffs are significant impediments for U.S. agricultural exports, particularly for consumer-oriented products like dairy products, meats, fresh fruit, snack foods, processed vegetables, and pet foods. The average Most-Favored-Nation (MFN) applied tariff rate was 9.8 percent in 2023 (latest data available).  Thailand’s average MFN applied tariff rate was 27.0 percent for agricultural products and 7.1 percent for non-agricultural products in 2023 (latest data available).  Thailand has bound 76.9 percent of its tariff lines in the World Trade Organization (WTO), with an average WTO bound tariff rate of 26.6 percent.  

Import licenses are required for the importation of many items, including wood, petroleum, industrial machinery, textiles, pharmaceuticals, cosmetics, firearms, and ammunition, and food and agricultural items, including plants, seeds, processed meats, and salt. Imports of certain items not requiring licenses are subject to extra fees and certificate of origin requirements. 

Corruption and lack of transparency in government procurement are major concerns for U.S. companies. When corruption is suspected during the bidding process, government agencies and state enterprises reserve the right to accept or reject any or all bids and may also modify the technical requirements or call for a retender. This affords government agencies and state-owned enterprises considerable leeway in making procurements, while denying bidders recourse to challenge procedures. 

Thailand is not a party to the WTO Agreement on Government Procurement, but it has been an observer to the WTO Committee on Government Procurement since 2015. Customs law in Thailand does not meet the standards established by The International Convention on the Simplification and Harmonization of Customs Procedures, otherwise known as “the Kyoto Convention.” Major problem areas include Thailand’s Customs Penalty Regime and Customs Valuation Procedures. 

The penalty for undervaluing imports into Thailand, even if done through negligence or by mistake, can result in a prison sentence of up to 10 years. Thailand is one of the few remaining major U.S. trading partners that provides incentives to customs officials who initiate investigations or enforcement actions. 

This incentive system has been a cause of concern for many years among Thailand’s trading partners due to the potential for corruption and the cost, uncertainty, and lack of transparency associated with the customs penalty and reward system. To address these problems, at least in part, Thailand amended the Customs Act in 2017. The amendment caps incentives at 20 percent of the sale price of seized goods (or of the fine amount) with a cap of 5 million baht (approximately $156,000). 

The amendment also limits post-audit inspections to within five years of the date of import or export. While a welcome development, it does not appear that the reduction of this remuneration would be sufficient to address the issue of potential conflict of interest or excessive personal incentives. The Customs Department conducted a five-year review (2019 through 2024) of the customs penalty and reward system to determine whether its laws and regulations needed to be revised to increase fairness and reduce corruption. The review studied the revenue impact of the penalty and reward system enacted under the 2017 law and compared incentive programs used in other countries.