Thailand and Malaysia aim for 1 trillion baht trade by 2027

Thailand and Malaysia have set an ambitious goal to boost bilateral trade to 1 trillion baht by 2027, with a focus on enhancing border economic connections through the Twin Cities initiative. Deputy Prime Minister and Minister of Commerce Phumtham Wechayachai outlined the plans following the third Thailand-Malaysia Joint Trade Committee (JTC) meeting in Kuala Lumpur.

Phumtham highlighted the strong relationship between the two nations, particularly between Malaysian Prime Minister Anwar Ibrahim and Thai Prime Minister Srettha Thavisin, who regularly discuss economic matters. This visit aimed to solidify their discussions and set a clear direction for future economic collaboration, said Phumtham.

“This is my first visit as Deputy Prime Minister and Minister of Commerce, and I am delighted because Malaysia is a close neighbour and Thailand’s top trading partner in ASEAN.”

Phumtham noted that both countries are committed to achieving the target of US$30 billion (1 trillion baht) in trade by 2027. Efforts will be made to expedite the opening of agricultural markets, with Thailand requesting Malaysia to accelerate the approval for importing beef, pork, and zebra doves.

Additionally, Thailand seeks certification for its chilled and frozen chicken products for export to Malaysia.

Both nations also plan to enhance border economic cooperation and boost border trade figures. A joint working group on border trade and investment, established by the two prime ministers, will work closely together.

Twin cities model

Malaysia will host the first meeting later this month, aiming to facilitate and address border trade and investment issues. Phumtham proposed linking the economies of five southern Thai provinces with five northern Malaysian states under the Twin Cities model. This would pair Narathiwat with Kelantan, Songkhla with Kedah, Satun with Perlis, Yala with Perak, and Pattani with Terengganu.

The initiative also aims to finalise a Memorandum of Understanding (MoU) on cross-border goods and passenger transport by the end of the year.

The two nations welcomed progress on the construction of the new Sadao-Bukit Kayu Hitam border crossing, scheduled for completion by 2025. This development is expected to streamline the transportation of goods and the movement of tourists across the border.

Phumtham also mentioned plans to foster new collaborations, particularly in the halal foods sector and franchising businesses where Thailand has a competitive edge. Both governments are keen on digital and data centre cooperation, which is anticipated to create a conducive environment for trade, attract investments, and facilitate the transition to a digital economy.

In his closing remarks, Phumtham invited Malaysian participation in the upcoming Border Trade Fair in Songkhla and other Thai trade promotion events in Malaysia in 2024, such as Thailand Week and international trade exhibitions in Thailand.

“On behalf of the Thai government, I extend my gratitude for the successful and effective meeting today.”

Malaysia remains Thailand’s top trading partner in ASEAN and the fourth globally. It is also the leading border trading partner for Thailand.

In 2023, total trade between Thailand and Malaysia was valued at US$25.12 billion, marking a 7.14% decrease. In the first five months of 2024, bilateral trade amounted to US$10.79 billion, a slight decline of 0.54%, with exports at $5.05 billion and imports at US$5.74 billion, reported KhaoSod.