The government of the United Kingdom has agreed to boost trade and investment with Thailand in the first such deal made by the new Labour government since it took office in July.
The enhanced trade partnership agreement, which aims to ease barriers to the flow of goods and services, was signed by Commerce Minister Pichai Naripthaphan and UK Trade Minister Douglas Alexander in Bangkok on Wednesday morning.
Under the agreement, the two countries committed to remove specific barriers to trade, focusing on areas including technology, customs and standards. The deal does not include include broad measures such as tariff cuts.
The Labour government under Prime Minister Keir Starmer is placing more emphasis on using trade to encourage economic growth after Chancellor of the Exchequer Rachel Reeves bemoaned the UK’s fiscal position. Her Conservative predecessors, she said, left a £22-billion ($29 billion) hole in the public purse.
During the campaign ahead of the July 4 election, Labour vowed to focus on smaller trade deals in areas of strength, rather than the more ambitious free trade agreements chased by the previous government, which either failed to materialise or took years to complete.
Deals like the one signed on Wednesday are “exactly the sorts of small things the UK government needs to be doing”, said David Henig, director at the European Centre for International Political Economy. “But they also need to ensure there is implementation — too often there is no follow-up.”
Britain has already struck sectoral side deals with Thailand, including a recent agreement by Bangkok to accept UK vehicle emissions testing standards, waiving the need for imported cars to be tested again under Thai standards, according to the Department for Business and Trade.
That deal could save UK car manufacturers “millions of pounds”, and a similar agreement for motorbikes is now being discussed, the department said.
Another recent deal, Thailand allowed UK food and drink manufacturers to submit conformity documentation by email, rather than having to get paperwork physically stamped by the British Embassy, a move the department said would be worth as much as £70 million to UK businesses over five years.
Wednesday’s trade pact will result in new and existing working groups tackling similar issues in areas such as digital trade and clean growth. Trade between the UK and Thailand, Southeast Asia’s second-largest economy, is already worth £5.9 billion a year.
Debra Crew, chief executive at the drinks company Diageo, which owns brands such as Johnnie Walker whisky, said she hoped the “enhanced partnership will be the first step towards resolving costly trade barriers”.
While in Asia, Mr Alexander will also attend a summit of Asean economic ministers in Laos, where he is expected to speak to peers from the 10-country bloc about the UK’s trade plans.