| Abstract | The slow economic recovery of developed countries, especially US, EU and Japan after the
global financial crisis in 2008 has made many developing countries’ firms, including Thailand,
to search for new market opportunity. Latin America is one of the key regions because of
many factors such as GDP growth and population. However, even though Thai government
has tried to promote firms to access more in Latin American markets, it is still unclear which
products the firms should pay attention more in the particular markets of Latin America. In
other words, which products that Thai firms have comparative advantage above other ASEAN
countries; other developing countries and even developed countries in the markets.
This project aims to examine the comparative advantage of Thai export products in five Latin
American counties, i.e Argentina, Brazil, Chile, Colombia, and Mexico, comparing to five
ASEAN countries and the rest of the world. Revealed Comparative Advantage Index (RCA)
is used as the key methodology. Based on the data analysis, it is found most of the products
that Thailand has comparative advantage above both ASEAN5 and the rest of the world are
manufacturing products. The key products include HS 20; Preparation of vegetables, fruits,
nuts or other parts, HS 58; Special woven fabrics, tufted textile fabrics, lace, HS 83;
Miscellaneous Articles of Base Metal, HS 84; Nuclear reactors, boilers, machinery and
mechanical, and HS 87; Vehicles other than Railway or tramway.
Firms and the government could pay more attention on these products in opening the market
to five Latin American countries since these products can compete well not only with the key
competitor like ASEAN5, but also the rest of the world. Our results also show that these
products were less sensitive to global demand slowdown and Thailand can still keep these
products as competitive above ASEAN5 and the rest of the world after the global crisis.
When comparing Thailand with ASEAN5 in Latin American markets, there are 28 products
that Thailand has comparative advantage. They are HS20, 21, 22, 32, 33, 35, 39, 41, 42, 56,
57, 58, 59, 60, 63, 67, 68, 69, 71, 72, 73, 76, 82, 83, 84, 85, 87, and 95. Most of them are
manufacturing products
Comparing with the rest of the world, there are 12 products that Thailand has a comparative
advantage in Latin American markets. They are HS16, 20, 40, 54, 58, 61, 64, 83, 84, 85, 87,
and 92. Most of them are also manufacturing products.
The results show that the numbers of categories that Thailand has a comparative advantage
above ASEAN5 are far more than the number of categories that Thailand has a comparative
advantage above the rest of the world. This shows that even Thailand has more comparative
advantage than other Asian countries; we still cannot compete with many countries outside the
region in Latin American markets.
Therefore, the quality of export sector of Thailand should be improved continually in order to
be even more competitive against other competitors in the world market. Furthermore, export
promotion policies could be implemented with strong consideration on net gain to the country
as a whole. Then, cooperation and agreement between two regions are necessary. This will
help transferring of knowledge i.e. technical assistance, R&D, and training of skilled labor as
well as reducing trade barriers among countries. |