An analysis of global value chain and the changing international economic landscape: Thailand’s participation in RCEP and CPTPP
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2024
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2567
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eng
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258 leaves
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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
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Tasawan Khao-uppatum (2024). An analysis of global value chain and the changing international economic landscape: Thailand’s participation in RCEP and CPTPP. Retrieved from: https://repository.nida.ac.th/handle/123456789/7031.
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An analysis of global value chain and the changing international economic landscape: Thailand’s participation in RCEP and CPTPP
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Abstract
This study investigates Thailand's position in Global Value Chains (GVCs) and its supply chain linkages within RCEP, CPTPP, and potential expansions of CPTPP involving India, the United States, the United Kingdom, and China. The assessment of Thailand's industry positions within GVCs suggests a moderate increase in backward linkages from 1995 to 2018. Although Thailand’s GVC position has improved over the period, it remained relatively downstream compared to Japan and the US, regardless of the trade pattern shifting toward Asia, especially involving China, Japan, and the US. RCEP has potentially shown a more decisive role than CPTPP, particularly in the food, rubber, and plastic sectors, with a contribution from China as a key downstream trading partner.
The following section analyzes Thailand’s participation in the GVCs dynamic over time. Following Thailand’s engagement in several existing and potential economic integrations, seven models were employed: RCEP, India, CPTPP, the US, the UK, China, and the UK+China. The relationships between domestic production and trade in intermediate and finished goods (exports and imports) across selected industries covering ICT, agriculture, textile, and automobile were investigated using the VAR model and Granger Causality analysis.
Empirical findings indicate the significant roles of essential trading partners, such as India, the US, the UK, and China, with or without their involvement in trade agreements in which Thailand is a member party. The emergence of RCEP highlights strong forward linkages; i.e., an increase in the import of intermediate goods from RCEP members leads to rising production in Thailand. Potential participants in CPTPP could also enhance Thailand’s GVC position, with the results revealing possible forward and backward linkages.
The impacts of COVID-19 on Thailand’s supply chain and its ability to respond were also investigated in this study. It is shown that the pandemic has induced some significant changes in the country’s supply chain across industries. At the same time, total production remained robust to meet domestic demand. There are some forward and backward linkages and alternations among trade sectors. The textile sector, for instance, experienced a substantial disruption and became increasingly dependent on domestic inputs. The role of economic integration, especially RCEP and CPTPP, is again exhibiting opportunity windows for Thailand to upgrade its GVC position by moving up the value chain.
The expansion of economic integrations has some interesting policy implications. Thailand’s RCEP partnership has strengthened trade, especially in the rubber and plastic industry, with India possibly joining as a key downstream partner. Expanding RCEP to include India could further enhance these benefits. Moreover, although joining CPTPP poses challenges, it would integrate Thailand more deeply into GVCs, mainly if the US or China joined. Strengthening backward linkages with RCEP engagement and diversifying sourcing from China can further build the country’s resilient supply chain.
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Thesis (Ph.D. (Economics))--National Institute of Development Administration, 2024