Thailand s Efficient Trade Agreement and Its Impacts on Poverty and Income Inequality

The purposes of this study are to examine changes in Thailand s economic structure in order to design the proper and efficient policies of Free Trade Agreement (FTA), and to investigate its impacts on macroeconomic variables, poverty, and income inequality. Research methodologies include the descriptive analysis, Revealed Comparative Advantage (RCA), and Computable General Equilibrium (CGE) model. The results reveal that there is a significant change in Thailand s economic structure between1961 - 2014. The proportion of agricultural output to Gross Domestic Product (GDP) dramatically declines as a result of slower increase of agricultural output compared to other sectors; meanwhile, the share of Thai GDP derived from industrial sector definitely increases as a result of the continual Thailand s national economic and social development plans since 1961, the promotion of international trade, and the export-oriented Foreign Direct Investment (FDI). Additionally, it is found that export, as economic motivator, accounts around 70 percent of Thai GDP which one of the stylized tools to boost trade is an agressive trade deal promising vast amount of traded volume. According to CGE model, Thailand derives maximum gains from trade through full liberalization in its competitive products while its sensitive commodities are still moderately protected.