Publication Code: Y89D
by Suthiphand Chirathivat, Chumphorn Pachusanond, and Tanasak Wahawisanz
Thailand's external sector has continued to increase in its importance to the Thai economy as a whole. With the growing globalization and interdependence of the world economy, this sector is, and will continue, to increasingly integrate into the world economic environment. At the same time, this sector is being again subjected to more protectionism from different countries. This has become obvious since the beginning of the 1980s, particularly regarding developed countries. Different protectionist types and measures are often in various forms, are complex to analyze, and are difficult to resolve. Trends show that different countries prefer to resort more frequently to non-tariff measures as their dominant method of protection rather than the former, more transparent tariff measures, which are now less important.
With the growing protectionism in the world economy, world economic management systems have also changed, they have become the major interest and forces prompted by the interrelationships between different countries. The multilateral management system, led by the General Agreement on Trade and Tariffs (GATT), is still maintained as an important focus for trade negotiations, although this institution is still not an effective forum or means by which to reduce or to effectively suppress widely used non-tariff measures. Bilateralism and unilateralism, meanwhile, have become increasingly involved in world economic management. The proliferation f unilateral actions against other countries and the setting of new bilateral arrangements have been viewed as threats to the world trading system established by the multilateralism of GATT. Moreover, regional and sub-regional management systems on different continents have challenged the overall view of tomorrow's world economies.
The dynamics of change in the management systems of the world economy will surely continue to have a tremendous impact on Thailand's external sector. In the coming decade of 1990s, the methods of conducing trade policy will change from liberal, free trade to more restricted, managed trade. Negotiations with different countries will be conducted more broadly and jointly between the public and private sectors. As competition impacts more strongly on its external sector, Thailand must clearly define its strategies and policy options, based on different management system levels. Overall, is ability to adjust should be flexible enough to allow for the maintenance of the external sector's competitiveness as well as to strengthen Thailand's negotiations for dealing with a new world economic management system climate.
December 1989