WorldCity, Annual Report: No. 15 Thailand- Breaking a billion | Connecting Local Business Leaders To The Global Economy

Annual Report: No. 15 Thailand- Breaking a billion

July 7th, 2006

Value-added goods dominate commerce between Georgia and Thailand, which seeks a free trade pact with the U.S.

Bilateral trade between Georgia and Thailand crossed the $1 billion mark thanks to big jumps in shipments of computers, televisions and aircraft parts.

Georgia’s trade with Thailand rose 27 percent in 2005 to close the year at nearly $1.3 billion, compared with $990 million in 2004. Exports jumped nearly 57 percent, to reach $325 million, but the trade relationship still favored Thailand as imports climbed 19 percent to a value of $931 million in 2005.

Georgia stands to see even more vibrant trade results if the United States and Thailand come to terms on the free trade accord they began negotiating in 2004.

For 2005, Georgia’s export growth was led by a striking 507 percent jump in jet part exports to Thailand. Cotton exports posted a double-digit gain while those of felt and other nonwoven materials swelled by 300 percent.

The United States is an important supplier to Thailand of agricultural products such as cotton, wheat and soybeans. According to the office of the U.S. Trade Representative in Washington, D.C., a free trade agreement would expand that to include a broader range of goods, including beef and pork.

Chemical wood pulp, one of the state’s most important exports, also registered an impressive double-digit improvements last year.

Georgia’s most important import from Thailand in 2005 was computers. The state brought in nearly $88-million worth of PCs and notebooks, a 14 percent gain compared with a year earlier. The mainstay of the Thai computer industry is the production of hard disk drives and related components. The sector is dominated by three big corporate players: Fujitsu, IBM and Seagate.

While electronic and value-added commodities had a driving role in the bilateral exchange between Georgia and its Asian trade partner, more traditional goods also figured among the top imports. Women’s undergarments, including bras, girdles, hosiery and garters, rose 2 percent in value to end 2005 near the $48 million mark. U.S. restrictions on Chinese textile imports last year prompted some multinational clothing manufacturers to turn to supplies in other places in Asia, including Thailand.

Natural rubber followed as the third most important Thai export entering the United States through Georgia. Thailand is the biggest natural rubber producer in the world. Georgia’s rubber imports approached $47 million last year, down nearly 10 percent from 2004, but imports of rubber gloves rose 23 percent and tire imports were up more than 90 percent.

The United States imports from Goodyear, Bridgestone, Michelin and 16 other tire manufacturers in Thailand. In 2005, Georgia’s tire imports from Thailand totaled $9.4 million.

The state’s imports of electronics, including color televisions and computer monitors, video recording equipment and computer parts, were also on the rise last year.

Georgia also brought in more than $19 million in air conditioners from Thailand in 2005, up from $14.5 million a year earlier. Thailand is a major producer of compressors, an important component in an air-conditioning system. Most of the air-conditioner production in Thailand is the result of joint ventures between Thai and international investors, principally those based in the United States, Japan and Taiwan. The factories are small or mid-sized and they usually produce under their own brand names, including Uni-Aire, Central Air, Nikko, Saffire and Akma.