BANGKOK -- Thailand aims to increase trade with countries on its borders by 15% this year, to a record high of 1.5 trillion baht ($50 billion). The government is backing the drive to offset an expected slowdown in overall export growth due to appreciation of the baht against the U.S. dollar.
The value of trade with Cambodia, Laos, Myanmar and Malaysia, combined with goods re-exported to Vietnam, was worth 1.3 trillion baht in 2017.
This cross-border trade consists mainly of Thai consumer goods like rice, sugar, canned food and semi-cooked food as well as auto parts and construction materials. The transactions are often in local currencies -- frequently the baht, because of its relative stability.
These exports totaled about 8 trillion baht in 2017, or around 16% of Thailand's total exports. But the Commerce Ministry said these figures are expected to rise substantially over the next few years as the economies of Thailand's neighbors continue to grow.
The government has promised support for the effort. "We aim to hold more trade visits and trade fairs in Cambodia, Laos, Myanmar, Vietnam and Malaysia this year to help accelerate trade between Thailand our neighbors," said Adul Chotinisakorn, director-general of the Commerce Ministry's Department of Foreign Trade, which oversees border trade issues.
Adul said the ministry also plans to export Thai products to smaller border towns instead of targeting only major cities, as was policy in the past. This could accelerate trade and investment in neighboring countries.
Given the use of local currencies, Abdul said border trade is expected to help reduce risks from exchange rate volatility, especially as the baht continues rising against the dollar.
A strong outlook for the economy and the country's efforts to restore democracy are seen behind the baht's appreciation.
The Commerce Ministry has set the 2018 export growth target at 8% to $255.6 billion, slightly lower than last year's growth of 9.9%, when a strong global economy helped boost demand for Thai products.
A headwind that could prevent exports from hitting 8% would be a strong baht, exporters said.
The baht rose more than 9% in 2017, and has risen 4.6% so far this year, raising concerns that higher prices could make Thai goods less competitive.