The Sustainability Impact Assessment (SIA) conducted by LSE Consulting’s Trade Policy Hub examines the potential impacts of a Free Trade Agreement (FTA) between the European Free Trade Association (EFTA) States and Thailand. Commissioned by the EFTA Secretariat, this assessment is designed to inform the ongoing negotiations, focusing on economic, social, environmental, and human rights considerations. The report uses a combination of quantitative and qualitative methodologies, including Computable General Equilibrium (CGE) modelling, to analyse the potential effects of the FTA.
The study highlights significant economic benefits for both EFTA States and Thailand, with trade in goods, services, and foreign direct investment (FDI) poised to grow. Thailand, in particular, is expected to see notable improvements in export and import flows, along with gains in services and business sectors. The FTA also promises enhanced intellectual property rights (IPR) protection, fostering innovation and promoting global integration. However, the report also cautions that economic gains may come with increased CO2 emissions and risks related to social and environmental sustainability.
On the environmental side, the report identifies concerns related to deforestation, biodiversity loss, and labour exploitation, especially in Thailand’s agricultural and fisheries sectors. The economic growth spurred by the FTA may exacerbate these issues if not properly managed. The report recommends the inclusion of strong sustainability standards and provisions to protect vulnerable groups, such as migrant workers, and to promote fair working conditions.
Overall, the assessment suggests that the EFTA-Thailand FTA offers considerable economic opportunities but requires careful attention to social and environmental impacts. Continuous monitoring and strong trade and sustainable development (TSD) provisions will be essential to ensuring that the benefits of the agreement are equitably shared while minimising any adverse effects.