October 20, 2025
Global trade has become an everyday issue with immense effects on trade and the economy. Today’s global trade climate sees countries around the world engaged in trade negotiations aspiring to eliminate trade barriers. Customs tariffs and associated privileges are among the issues that most impact global trade flows and the import-export sector. Thailand has negotiated customs tariff privileges as part of its 14 free trade agreements (FTAs) with 18 countries, including six bilateral and eight regional agreements. These FTAs set forth criteria for member states to comply with and adopt into national law. For customs privileges, one of the most important criteria for achieving customs privileges is rules of origin, which indicate the originating country of imported or exported goods and the accompanying duty rates or privileges for reduction or exemption. Rules of Origin Under FTAs The rules of origin mapped out in FTAs allow for duty exemptions or exemptions or rate reductions based on the determination of goods’ country of origin. This largely includes two main categories: Wholly obtained (WO) means the product was entirely produced in a single originating country and does not include any foreign (non-originating) content or manufacturing process. Product specific rules (PSR) are detailed criteria that define how each product’s origin is determined. PSR criteria that are often found in FTAs include “change in tariff classification” (determining origin based on sufficient transformation of materials), “regional value content” (requiring a minimum percentage of value to be added locally), and specific manufacturing or processing operations (mandating particular production steps occur in the originating country). These criteria also extend to cover other subordinated methods of verification, such as accumulation rules and de minimis rules, to provide more flexibility for the establishment of origins and tariff privileges under such FTAs. Compliance Challenges Despite attempts to promote international trade