Case Study
Sustainable Impact Assessment of the Free Trade Agreement between the European Free Trade Association and Thailand
A collaboration with the European Free Trade Association (EFTA) Secretariat
This Sustainability Impact Assessment (SIA) was commissioned by the European Free Trade Association (EFTA) Secretariat in parallel to the ongoing negotiations for a Free Trade Agreement (FTA) between the EFTA States and the Kingdom of Thailand. EFTA aimed to conclude an ambitious and comprehensive FTA, extending beyond existing World Trade Organization (WTO) obligations and addressing all relevant areas on the Parties' free trade agenda.
EFTA Secretariat's requirements
The EFTA Secretariat was seeking partners who could meet the following criteria:
- Enhance the understanding of sustainability impact of the prospective FTA
- Disseminate information to the public on potential benefits and risks
- Inform the ongoing negotiation process
- Provide a basis for future monitoring and engagement regarding the implementation and reinforcement of the FTAs
Our approach
The potential FTA, while aiming to stimulate economic activity in both partners, also wanted to ensure the contribution of the potential FTA to the wider economic, social, environmental, and human rights objectives and to ensure that it will not have adverse impact on any of these areas. LSE provided qualitative and quantitative information through the SIA, despite its challenging nature to have a full understanding of the agreement’s impact.
The conclusion of a comprehensive Free Trade Agreement (FTA) may stimulate economic activity in the EFTA States and Thailand through trade and investment. The commitments and trade opportunities between partners may have different impacts across economic sectors depending on their export potential, as well as the social, human rights, and environmental aspects associated with each sector. Considering this, the EFTA Secretariat, on behalf of the EFTA States, has collaborated with Trade Policy Hub to develop a Sustainability Impact Assessment (SIA) for the proposed FTA between the EFTA States and Thailand.
Our contributions
Through these efforts below, the Trade Policy Hub has collaborated with the EFTA Secretariat to develop a Sustainability Impact Assessment for the proposed FTA between the EFTA States and Thailand.
Baseline Scenario Development
This step involved an analysis of the current situation in the EFTA States and Thailand, utilising Computable General Equilibrium (CGE) modelling. This highlighted potential trade and economic impacts, including risks and opportunities in goods, services, foreign direct investment (FDI), intellectual property rights, and specific sectors.
Screening for Issues
This step identified potential concerns and sectors requiring closer examination. It provided a preliminary understanding of the areas, which are most likely to be affected by the agreement.
Sustainability Risk Analysis
The third step focused on assessing the sustainability risks of the future FTA, considering the whole economy, various population groups, and environmental elements. This analysis identified potential sustainability concerns that require monitoring and mitigation.
Formulating Conclusions and Recommendations
The final step involved deriving conclusions and recommendations based on stakeholder engagement throughout the project. These recommendations emphasised the need for ongoing monitoring and implementation to manage potential risks effectively.
About the European Free Trade Association (EFTA) Secretariat
The European Free Trade Association (EFTA) is the intergovernmental organisation of Iceland, Liechtenstein, Norway and Switzerland. It was set up in 1960 by its then seven Member States for the promotion of free trade and economic integration between its members. Their main tasks are:
- Maintaining and developing the EFTA Convention, which regulates economic relations between the four EFTA States
- Managing the Agreement on the European Economic Area (EEA Agreement), which brings together the Member States of the European Union and three of the EFTA States – Iceland, Liechtenstein and Norway – in a single market, also referred to as the Internal Market
- Developing EFTA’s worldwide network of free trade agreements
