Trade between Thailand and Myanmar is to receive massive investment in a bid to restore economic ties.

The fifth Thaiand-Myanmar Joint Trade Commission (JTC), which met in April 2010, restored the mechanism for economic cooperation between Myanmar and Thailand that had been suspended for over six years.  This meeting re-affirmed the shared commitment to strengthen and promote bilateral trade and economic activities between the two countries.  By 2015, the target is to reach USD 13 billion in bilateral trade.

Situated in the southwest of Myanmar, a deep-sea port at Dawei is being built and should be completed in 2013.  It will be capable of docking 300,000 TEUs liners that sail between Europe and Africa, and the Middle East and South Asia, plying the India Ocean and the Andaman Seas.

Dawei Port is a major factor in the overall strategy to create an East-West Economic Corridor (linking Danang in Vietnam to Mawlamyine in Myanmar), the Southern Economic Corridor (Ho Chi Minh City - Dawei), and the North-South Economic Corridor (Kunming-Bangkok).  The new deep-sea port will also enhance Thailand’s role as a regional hub, linking countries on the Western and Eastern coasts of the Asian continent via these three new trade routes.

Goods transported via the North-South Economic Corridor (NSEC) will shorten the journey from South China to the Andaman Sea from 16-18 days to just six days, bypassing the Malacca Strait.

West Side Stories
The West Gate Policy launched at the fifth JTC involves construction of a 2,400-km highway covering 10 Thai provinces that share a border with Myanmar.

Although existing bilateral trade is worth approximately 150 billion baht per year (of which natural gas accounts for 90 billion baht), the new trade route which runs from Mae Hong Son to Ranong will stimulate an even more rapid expansion of bilateral trade, said H.E. Alongkorn Ponlaboot, Deputy Minister of Commerce

Direct links between Dawei Port and Laem Chabang will also enable 24-hour delivery of cargo from the EU, Middle East, Africa and South Asia to Laem Chabang. Transshipment to China, Korea, Japan and the Pacific Rim will also be faster.  The alternative route from Ho Chi Minh City to Chennai via the Malacca Strait takes five days longer.

“As well as triggering trade expansion between Thailand and Myanmar, GMS Economic Corridors will serve as gateways to the West and the East, linking the India Ocean and the Pacific.  On-going construction of the Kanchanaburi-Dawei Highway, to be completed in 2013, will create a new land bridge in South East Asia,” said H.E. Alongkorn.

Check points to be upgraded
Another benefit of the Thailand-Myanmar meeting was a mutual agreement to triple bilateral trade volume by 2015.  Closer collaboration to boost trade and data exchange, promote joint activities such as domestic trade fairs, and concrete measures to ease cross-border procedures such as Single Service Inspection and the pilot project at Mae Sod-Myawaddy, will increase bilateral trade value from USD4,300 million to USD13,000 million.

To maximize the benefits of the North-South and East-West Economic Corridors, R3W highway and the Thai-Myanmar Friendship Bridge at Mae Sod will be upgraded while construction of Friendship Bridge II will be accelerated.

To ease cross-border cargo flow, two trade border points will be upgraded into permanent trade border points, at Huay Ton Noon (BP13) and Singkorn-Moodong  in Prachuap Kirikhan province.  Phayarthonesu opposite the Three Pagodas trade border point in Kanchanaburi will also be re-opened to ease border activities.

Security fears block new trade routes
Whilst re-iterating the potential benefits from on-going development of Dawei Port and the new trade route along Thai-Myanmar borders, H.E. Brig Gen Aung Tun, Burma’s Deputy Minister of Commerce, admitted that Burma is still concerned with national security problems and minority groups.

During the recent negotiations, the Thai delegation stressed the need to accelerate construction of the new trade route from Myawaddy to Mawlamyine.  To facilitate on-going construction of this road and Dawei Port, commissioned to Thai private enterprises, the Myanmar delegation promised to simplify importation procedures for construction equipment.  Joint efforts will also be made to develop the new trade routes linking Mae Hong Son to Naypyitaw and Thandwe.

The Kanchanaburi-Dawei highway is now nearly completed apart from the 500 meters to the border.  This lies within an area that is still pending official border demarcation and is controlled by Myanmar dissident minority groups.

Multi-billion baht schemes for highways and estates
Phase I of the Dawei Port development project, which starts this year, involves construction of a 160-km Kanchanaburi-Dawei Highway, which will be finished in 2013.  During construction of this 2 billion baht highway, a second phase to construct the deep-sea port will also be launched, along with Phase III, the development of the region’s largest industrial estate worth 400 billion baht.
Although the West Gate policy centers on two host countries, Thailand and Myanmar, several other countries will be involved: Japan, China, India and the BIMSTEC countries.  The latter group represents direct stakeholders as well as markets.  Thailand is also involved in investment projects within the framework of GMS-China and GMS-Japan cooperation agreements.

The industrial estate project covers an area of 200,000 rai and will be divided into various zones: Zone A: Port & Heavy Industry, Zone B: Oil & Gas Industry, Zone C1: Up Stream Petrochemical Complex, Zone C2: Down Stream Petrochemical, Zone D: Medium Industry and Zone E: Light Industry 

Thailand’s western region, which includes Kanchanaburi, Ratchaburi, Petchaburi, Prachuab Kirikhan, Samut Songkhram, Samutsakorn, Suphanburi and the western area of Bangkok will benefit from the West Gate Policy in terms of export/import expansion and growth in logistics and related businesses.  Agro-industry will also benefit from the national policy to become a production base for world food supply and a processing hub for food exports.  Thirdly, the transformation of mountainous areas into new border towns and checkpoints will promote tourism.  Lastly, the West Gate policy will open up a new trade route to world markets and create a land bridge that will have a far-reaching impact, possibly of a similar magnitude to the Panama Canal. 

As oil prices are expected to remain around USD70-80 per barrel, the new trade route will relieve the congestion around the Malacca strait and offer an interesting transport solution that is not only cost-effective but also improve logistics management efficiency.