Since the 2014 coup d’état in which the Thai military suspended the constitution and took control of the government, a new constitution was drafted and approved through a referendum in 2016. Thailand held general elections in March 2019 and recently in May 2023.  In 2023, Thailand held general elections with the Pheu Thai party successfully leading a coalition government that led to the confirmation of Pheu Thai’s candidate Sretta Thavisin as Prime Minister. 

Thai industries face intense competition from both global and domestic suppliers of goods and services.  Major Thai conglomerates are family businesses that span generations and are often now headed by third-generation business leaders.

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 a market-entry strategy.

Thailand’s average Most-Favored-Nation (MFN) applied tariff rate was 11.5 percent in 2021 (latest data available).  The average MFN applied tariff rate was 31.2 percent for agricultural products and 8.4 percent for non-agricultural products in 202.  Thailand has bound 75.2 percent of its tariff lines in the World Trade Organization (WTO), with an average WTO bound tariff rate of 28.0 percent.

Thailand imposes food safety inspection fees in the form of import permit fees on all shipments of uncooked meat. The current fee level was set in October 2016 at 7 baht per kg (approximately $202 per metric ton [MT] for imported uncooked meat for food or feed and at 3 baht per kg (approximately $86/MT) for imported uncooked meat for purposes other than food or feed.  These fees appear to be disproportionate to the cost of services rendered.  Under the Thai Animal Epidemics Act of 2014, the Ministry of Agriculture and Cooperatives (MOAC) Department of Livestock Development (DLD) has discretionary authority to increase these import fees up to five-fold.

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.  In some cases, imports of certain items not requiring licenses are subject to extra fees and certificate of origin requirements. Additionally, a number of products are subject to import controls under miscellaneous laws.

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.  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 provides incentives to customs officials who initiate investigations or enforcement actions.  Thailand is one of the only major U.S. trading partners that still has such an incentive system.  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 five years from 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 is conducting a five-year review (2019 through 2024) of the customs penalty and reward system to determine whether its laws and regulations need to be revised to increase fairness and reduce corruption.  The review will study the revenue impact of the penalty and reward system enacted under the 2017 law and compare incentive programs used in other countries.