Trade and economic ties are an important part of relations between Russia and Thailand. They are based on such intergovernmental bilateral documents as the General Trade Agreement dated December 25, 1970, the Convention for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income of September 23, 1999. At the moment the procedures for the entry into force of the Agreement on promotion and mutual protection of investments dated October 17, 2002 are being completed. In addition, the Agreement on Cooperation between the Chamber of Commerce of Russia and the Chamber of Commerce of Thailand of 1997, the Agreement on Cooperation between the Russian Union of Industrialists and Entrepreneurs and the Federation of the Thai Industries of 2003 and the Agreement on Cooperation between the Russian-Thai Business Council and the Thai-Russian Business Council, the Memorandum of Understanding and Partnership between the Ministry of Economic Development of Russia and the Board of Investment of Thailand dated 2015, Memorandum of Understanding between the Ministry of Energy of the Russian Federation and the Ministry of Energy of the Kingdom of Thailand on energy cooperation dated 2015 are already in place.
In recent years, there has been a positive dynamics of growth of the Russian-Thai bilateral trade. For instance, in 2014 the trade turnover demonstrated decent growth numbers – according to the Federal Customs Service of Russia, the trade volume grew by 18.7% and amounted to 3,986.8 mln. US dollars. Russian exports increased by 37.8% and reached 1,755 mln. US dollars and Russian imports rose by 7% to 2,231.8 mln. US dollars. Russia's deficit in trade with Thailand in the year 2014 was equal to 476.8 mln. US dollars.
According to the Thai trade statistics, the volume of bilateral trade with Russia in 2014 amounted to 4,913.6 mln. US dollars. Russian exports figures are estimated at 3,708.5, whereas Russian imports – at 1,205.2 mln. US dollars. Therefore, a surplus in trade with Thailand was equivalent to 2,503.3 mln. US dollars.
In the structure of Russian exports to Thailand, a lion’s share of supplies accounted for the following goods: crude oil and other raw energy resources (66.4%), metals and metal parts (13.3%), fertilizers (8.0%), jewelry (3.5%), metal ores, scrap, metal waste (2.2%), fats and oils (1.5%), natural gas (1.3%), vegetables (1.2%), fresh and frozen seafood (0.7%). Since the beginning of 2015, have significantly increased Russian exports of fats and oils (by 172%), meat (by 134%), machinery (by 55.1%). The shipments of Russian natural gas to Thailand resumed. However, supplies of jewelry decreased by 48.4%, exports of fertilizers fell by 37.7%, supplies of vegetables dropped by 31.6%, animals and products of animal origin deliveries declined by 33.5% and exports of paper and pulp shrank by 20.3%.
The structure of the Russian imports is mainly formed by cars and car parts (24.2%), precious stones and jewelry (10.8%), polymers (6.6%), preserved fruit (4.8%), rubber (4.3%), machinery products and their components (3.8%), electrical equipment and parts (3.2%), canned fish and seafood (2.9%). There was a dramatic increase in imports of the air-conditioning systems (+121.7%), jewelry (+98.6%), rice (+97.0%) and polymers (+40.1%). Russian imports of electrical equipment and its components slumped by 40.1% and supplies of radio and TV receivers from Thailand lost 32.0%.
In mid-December of 2014, the shipment of the first lot of Thai pork to Russia took place. The volume of the lot amounted to approximately 800 tons. The event is of a historic significance since in the course of this symbolic action meat products from Thailand were given access to the Russian agricultural market.
In the first quarter of 2015 there was registered a noticeable decline of bilateral trade. According to the data of the Federal Customs Service of Russia, the trade turnover in January-March fell by 24 percent to 567 mln. US dollars. Russian exports decreased by 43.3% to the level of 171.6 million USD. The negative trends were mainly precipitated by a fall in prices of oil and petrochemicals, which make up a substantial share of Russian exports to Thailand.
According to the Bank of Russia, the accumulated volume of Thai investments in the Russian economy at the end of 2013 was equal to 68 million USD. In the economy of Thailand for the same period there have accumulated 281 million US dollars of Russian investments for the same period. Experts estimate that the total volume of Thai investments in the Russian economy at the end of 2014 amounted to about 500 million USD, whereas Russian investments in Thailand were roughly 300 million USD.
The largest investment of Thai capital into the Russian economy is made by a leading agro-industrial holding company “Charoen Pokphand Foods” which is carrying out investment projects in Moscow, Kaluga and Kaliningrad regions, where the company runs a feed plant and seven pig farms. The volume of investments already exceeds 300 million US dollars. In the near future, the holding company plans to increase its investment in Russia to 1 billion US dollars.
On June 30, 2015, a Thai company “Sutech Engineering Co., Ltd.” signed an agreement with the Khabarovsk Territory investment and development on cooperation in the implementation of the investment project, which implies a construction of a sugar plant with a capacity of 1.5 thousand tons per day in the city of Sovetskaya Gavan. The estimated cost of this project is 200 million USD.
In energy sector Thai companies show interest in increasing Russian energy supplies from the Far East. A Thai state-run oil and gas company “PTT Plc.” is looking into a possibility of investing money abroad, including in Russia, to implement long-term projects on exploration, extraction and liquefaction of natural gas. Both sides keep an interest in conducting joint projects in the sphere of energy in third countries as well. However, contacts between a Russian company “Gazprom” and “PTT” under the Agreement on strategic partnership signed in 2005 are barely maintained (only one meeting of the Joint Coordination Committee was convened in 2006).
Another promising area of bilateral cooperation is atomic energy and nuclear technologies (despite the moratorium on construction of nuclear power plants throughout the country, the Government of Thailand has not abandoned its plans to develop nuclear energy in the long term). Within the framework of implementation of Memorandum of Understanding between Russia and Thailand signed in September of 2014 the first meeting of the Joint Russian-Thai working group on cooperation in the field of nuclear energy use for peaceful purposes was held (Bangkok, April 20-21, 2015).
The Joint Russian-Thai commission on bilateral cooperation (co-chairs: from the Russian Side is H.E. Mr. Denis V. Manturov, Minister of Industry and Trade, from the Thai Side is H.E. General Tanasak Patimapragorn, Deputy Prime Minister and Minister of Foreign Affairs) remains an important mechanism of bilateral interaction. The sixth meeting of the Commission took place on July 15, 2015 in Moscow. During the meeting, the Sides discussed issues of cooperation in the fields of industry, trade, agriculture, energy and transport and noted an increased interest in mutual investment. In addition, the final document, which is a road map for bilateral cooperation in a wide range of areas, was adopted.
At the negotiations in Moscow, the partners also discussed a possibility of establishing interbank cooperation and gradual shift to performing mutual settlements for trade transactions in national currencies, as well as the prospects of concluding a Free Trade Agreement between the member states of the Eurasian Economic Union and Thailand.
H.E. Mr. Denis V. Manturov, Chairman of the Russian part of the Joint Commission, paid an official visit to Thailand twice – in 2013 and 2015.
Within the framework of the Joint Commission operate two Sub-Commissions: on trade and economic cooperation (the last meeting was held in November 2014 in Moscow) and on agricultural cooperation (the last meeting took place in July 2015 in Moscow).
The Russian-Thai and Thai-Russian business councils have been working since October 2006 and November 2007 respectively. The Russian-Thai business council counts around 40 Russian companies. Its chairman is Mr. Ivan Polyakov. The Thai-Russian business council consists of the Board of Trade of Thailand, the Federation of Thai industries, the Thai Bankers’ Association, as well as representatives of government agencies and business community of the country. Its chairman is Mr. Kriengkrai Thiennukul.
There is a regular exchange of trips of business missions of the two countries.
Direct contacts are carried out between the Ministry of Economic Development of the Russian Federation and the Ministry of Commerce of the Kingdom of Thailand. The Trade Representation of Russia works in Bangkok and the Office of Commercial Affairs of the Thai Embassy functions in Moscow.