Bhutan gains duty-free access for apples, potatoes with FTA

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The Free Trade Agreement (FTA) between Bhutan and Thailand, slated for implementation by January 2026, presents export potential for Bhutan’s apples and potatoes. Thailand will eliminate tariffs on 94% of its 10,731 tariff lines, which currently include tariffs of up to 60% for Bhutanese apples and potatoes. This change will allow these products to enter the Thai market duty-free.

Apples, a staple of Bhutan’s high-altitude horticulture, face tariff barriers in regional markets. With this FTA, these barriers are removed, as apples will now enter Thailand at zero duty, increasing their price competitiveness. Potatoes, one of Bhutan’s primary crops, are also set to benefit under the agreement.

A Country-Specific Quota (CSQ) has been established by Thailand for 11 sensitive agricultural products, including an annual allowance of 20,000 metric tonnes (MT) of duty-free potato exports from Bhutan. This ensures reserved access for Bhutanese potatoes without seasonal or volume limitations.

Further advantages of the agreement include simplified trade procedures and a reduction in the local content requirement from 40% to 30% for Bhutanese exports to qualify for duty-free entry. Of Bhutan’s proposed 165 products, 138, encompassing apples and potatoes, are included under this adjusted rule, easing customs processes and lowering compliance demands for exporters.

The FTA might contribute to reducing Bhutan’s trade deficit with Thailand by increasing exports of staple agricultural goods. The provision of a special quota and relaxed rules of origin holds significance for Bhutan’s farmers in highland areas, where apples and potatoes play a crucial economic role.

Parliamentary discussions saw the agreement endorsed as a strategic choice for trade liberalization and rural income stimulation. Although some officials expressed concerns about the impact of increased Thai imports on consumers, the government outlined that mechanisms are in place to monitor and balance trade.

The agreement not only seeks to strengthen Bhutan’s relations with Thailand, a key ASEAN member, but also lays the groundwork for entry into broader regional markets. With the new positioning of apples and potatoes for international exposure, the FTA might offer opportunities for Bhutanese agriculture to scale up production and elevate its global standing.

Source: Asia News Network

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