New reports suggest that Myanmar and Thailand recently agreed to adopt a new trading model, in order to increase bilateral trade between the two nations. Htet Tayza comments.
Thailand is one of Myanmar’s most important trading partners. Both countries are also members of the Association of South-East Asian Nations (ASEAN), an inter-governmental body which strives to facilitate economic and social expansion among member states. Myanmar is Thailand’s 8th and 15th largest trading partner among ASEAN nations and worldwide respectively.
Official data suggests that throughout the past five years, the value of bilateral trade between Myanmar and Thailand equalled an average of US$7.37bn. In 2015, trade between the two countries was valued at US$7.47bn, with 80% of this activity attributed to border trade. The two nations hope to increase bilateral trade to between US$10bn and US$12bn by 2017.
The countries’ Commerce Ministers discussed how to reach this goal at the seventh Thailand-Myanmar Joint Trade Commission (JTC) conference, which was held recently in Nay Pyi Taw. After the meeting, Thai Commerce Minister Apiradi Tantraporn announced that she and her Myanmar counterpart, Than Myint, have agreed to adopt the Mae Sot-Myawaddy model to boost bilateral trade.
With the Mae Sot-Myawaddy model, independent newspaper Nation Multimedia reports, Myanmar and Thailand will seek to achieve a number of aims. This includes establishing local business councils, doubling border trade, setting up a Thai-Myanmar border trade committee, facilitating cross border logistics and developing retail and wholesale trading and service centres at the Mae Sot-Myawaddy Special Economic Zone. The two nations will also set up a sister-city relationship between Mae Sot and Myawaddy and “facilitate tourism cooperation.”
Commenting on this development, Apiradi Tantraporn explained: “Thailand and Myanmar have agreed to take the agreement into an action plan so that trade, investment and tourism between two countries can grow strongly. Thailand will also organise border-trade fairs in Mae Sot this year as a measure to support trade growth between the two countries.”
The Commerce Ministers also talked about how to solve trade related issued by setting up a CLMVT (Cambodia, Laos, Myanmar, Vietnam and Thailand) Business Council spearheaded by the private sector. Furthermore, Myanmar has promised to allow more Thai bank branches to open in its territory going forward and to adjust its rules of origin, to boost trade among ASEAN members.
A recent report from the Asian Development Bank (ADB), suggested that Myanmar could be the fastest growing Asia-Pacific economy in 2016. However in order to tap into this considerable economic potential, it needs to attract more foreign direct investment (FDI), in order to supply key industries such as agriculture with vital expansion capital. Myanmar’s government recently announced that it hopes to increase FDI to US$140bn by 2030. Between 2016 and 2017, Myanmar will enhance its import and export sector in order to facilitate trade and raise foreign investment levels.
With the announcement that Myanmar and Thailand will adopt the Mae Sot-Myawaddy model to boost bilateral trade, we see how the country could tap into its economic potential. Official data suggests that the Mae Sot-Myawaddy international border checkpoint is the largest cross-border trade region by value between Myanmar and Thailand. With this model, Myanmar can concentrate on developing its incredibly lucrative cross-border trade with Thailand, to expand economic growth.