Trade liberalization in Thailand and its economic effects on the rice, rubber and sugar industries

Results of the study revealed that the nature and extent of trade liberalization in Thailand varied by type of agri-based products. Rice export was almost absolutely free from all types of trade restrictions in 1986, while rubber export restrictions were reduced at a low level in 1990. A clear-cut direction of sugar trade was established in 1983 under the revenue sharing system. As expected, there were significant improvements in foreign trade and domestic production of all commodities after the second trade liberalization. Rubber showed the highest improvement in foreign trade and domestic production, followed by sugar and rice. Rice consumption declined, but rubber and sugar consumption increased partly due to an increase in consumer income. All these agri-based products were still competitive in the export market, although their export competitiveness declined through time due to high competition in the world market as a result of the entry of other foreign suppliers. This implies that Thailand has to further increase the level of productivity and improve product quality. The country cannot just rely on the export of its raw products or the simple processed products such as milled rice, rubber smoked sheet and raw and refined sugar in the long run. It has to give more emphasis on product development so that high-value processed products such as block rubber or automobile tires and other spare parts may be introduced. Trade liberalization exhibited positive and significant effects on the foreign trade of rice and domestic production of rice and rubber. The export competitiveness, foreign trade and domestic production (at the farm level) of sugar were also significantly affected by trade liberalization, but with negative effects. On the other hand, the influence of trade liberalization on the level of export competitiveness of rice and rubber, foreign trade of rubber, domestic production (at the plant level), and domestic consumption of the three agri-based products of Thailand was insignificant