Petrochemical Group Warns Against Rapid Thailand-UAE FTA

Prachachat•Economy•17m ago

Reader Briefing

The Thailand Petroleum and Energy Institute urges the government to implement gradual tax cuts and import quotas in the Thailand-UAE FTA to protect domestic petrochemical producers.

•The Thailand Petroleum and Energy Institute proposed protective measures to the Department of Trade Negotiations in December 2024.
•Domestic producers of PE and PP plastics face competition from UAE products that have lower production costs due to oil and gas resources.
•Proposed measures include gradual tax reductions over 5-10 years and the establishment of import quotas.
•Large operators including GC and SCGC seek to provide data to the government to ensure an adjustable transition to trade liberalization.

Overview

•The global petrochemical industry is in a downturn, putting pressure on Thai producers of PE and PP plastics.
•UAE producers have a competitive advantage due to abundant oil and gas resources and lower production costs.
•The Thailand Petroleum and Energy Institute submitted study data to the Department of Trade Negotiations in December 2024.
•Kurutjit Nakornthap suggests that tax reductions should be gradual, such as reducing from 5% to 3% in the first 5 years, and then to 0% in the next 5 years.
•The Thailand Petroleum and Energy Institute proposes that the government set import quotas and encourage UAE investment in Thai firms or third countries.
•In 2025, Thailand imported approximately 598,000 tons of PE, with UAE accounting for approximately 27,000 tons.
•In 2025, Thailand imported approximately 447,000 tons of PP, with UAE accounting for approximately 23,000 tons.
•Thai petrochemical operators must seek new markets in Africa and South America and develop specialty products to increase value.

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Source: Prachachat (Original)

Key Quotes

Kurutjit Nakornthap

"The global petrochemical industry is currently in a downturn."

อุตสาหกรรมปิโตรเคมีโลกกำลังอยู่ในช่วงขาลง

Kurutjit Nakornthap

"Tax reductions should be gradual."

การลดภาษีควรเป็นการทยอยลด

Key Entities

Person

Kurutjit Nakornthap(คุรุจิต นาครทรรพ)

Director of the Thailand Petroleum and Energy Institute.

Organization

Thailand Petroleum and Energy Institute(สถาบันปิโตรเลียมและพลังงานแห่งประเทศไทย)

A non-profit foundation that studied the impact of the FTA on the petrochemical industry.

Department of Trade Negotiations(กรมเจรจาการค้าระหว่างประเทศ)

The government agency that received the study data from the Thailand Petroleum and Energy Institute in December 2024.

Ministry of Commerce(กระทรวงพาณิชย์)ℹ️

The ministry overseeing the Department of Trade Negotiations and responsible for designing import quota systems.

A large petrochemical operator wanting to present data to the government.

SCGC

A large petrochemical operator from the cement group wanting to present data to the government.

Place

Thailand(ไทย)ℹ️

The country negotiating an FTA with the UAE and home to the affected petrochemical industry.

United Arab Emirates(สหรัฐอาหรับเอมิเรตส์)ℹ️

The country negotiating an FTA with Thailand and a producer of low-cost PE and PP products.

Policy

Thailand-UAE FTA(FTA ไทย-สหรัฐอาหรับเอมิเรตส์)

The free trade agreement under negotiation between Thailand and the United Arab Emirates.