The Past Holds Clues to Thailand’s Foreign Policy under Pheu Thai

Predictions of a foreign policy reset following the upset of Thailand’s long-dominant conservative establishment in the May 2023 election have proved to be premature. The junta-appointed Senate, permitted by the Kingdom’s 2017 Constitution, has stonewalled Pita Limjaroenrat, the Move Forward Party’s candidate for Prime Minister. Pita, a businessman, and leading progressive reformer, had suggested a dramatic foreign policy shift, declaring in June that they would align with previous ASEAN chairs in distancing Thailand from engagement with Myanmar’s junta.

As the attempt to nominate Pita failed for a second time, Move Forward relinquished leadership of an eight-party coalition to the second-place Pheu Thai Party, a creation of former exiled Prime Minister Thaksin Shinawatra. After inviting conservative parties to join the coalition, the shape of the next government is unclear. But in terms of foreign policy, the recent past offers clues about the future direction.

When Yingluck Shinawatra, Thaksin’s sister, took power in July 2011, her Foreign Minister Surapong Tovichakchaikul vowed immediately to visit all ASEAN countries, and over the course of the next few years, engagement with neighboring countries improved, including Cambodia with whom Thailand feuded with over the Preah Vihear temple. The Pheu Thai government also worked to build a relationship with Vietnam, exchanging high-level visits and participating in mutually beneficial avenues of cooperation. The Yingluck-era foreign policy was comparable to that of her brother, who often used international fora such as ACMECS to boost regional cooperation, although both fell far short in managing cross-border issues such as human trafficking, migrant labor, and transnational crime.

Cooperation and Collaboration

This relatively cooperative foreign policy stands in contrast to the pragmatic, restrictive, and self-serving policy of the Prayut era, evidenced by the long-standing mantra of “constructive engagement” with Myanmar for the benefit of a few elite actors, and where personal ties between respective militaries have put Thailand at odds with other ASEAN member-states. Singapore and Indonesia have both tried to isolate Myanmar’s generals and push for the implementation of the Five-Point Consensus. As the caretaker government remains in power until a new government can be formed, Thailand has not ceased its engagement, with Thai Foreign Minister Don Pramudwinai meeting recently with junta members, revealing recently that he had met with former State Councilor Aung San Suu Kyi, who was detained and arrested shortly after the Tatmadaw had seized power.

While the Pheu Thai campaign this past May was led in part by Paethongtarn Shinawatra, the youngest daughter of the former Prime Minister, the party also nominated Srettha Thavisin, a real estate mogul. Thavisin had expressed an interest in pursuing a free trade agreement with the European Union (EU), negotiations of which were halted after the Thai military under Gen. Prayut Chan-o-cha took power in a coup in May 2014. According to the European Commission, Thailand is the EU’s fourth most important trading partner in the region and the EU is the third largest investor in Thailand, accounting for 10 percent of foreign direct investment (FDI) in the Kingdom. The EU, like many Western countries, put conditions on some trade talks, insisting that the government restore a “legitimate democratic process”, which partially occurred in 2019 with some gradual progress achieved this past May.

Srettha’s desire to restart negotiations with the EU points to the possibility of other avenues of bilateral cooperation that had stalled under the Prayut government. Attracting foreign investment would be a major catalyst to regional cooperation. Despite historical success, FDI has been on a downward trajectory under Prayut with some of that attributable to the COVID-19 pandemic. However, FDI inflow is heavily concentrated from just a handful of countries—the U.S., Japan, and Singapore. As the Organisation for Economic Co-operation and Development (OECD) in 2021 suggested, targeting FDI from other countries, particularly from ASEAN members, would reduce Thailand’s vulnerability to external economic shocks.

Diversification and Development

Also, in areas of bilateral cooperation, existing partnerships are likely to continue and advance, regardless of the composition of the governing coalition. Thailand has nurtured partnerships in the Indo-Pacific, particularly with India and Japan, in areas of economic and security cooperation. Relations with India date back to its independence from the British, and India’s strategic partnership with Thailand is in line with its “Look East” strategy. Changing perceptions of security, namely non-traditional threats and international terrorism have accelerated joint security cooperation. Bangkok’s historic relationship with Tokyo will remain important, not only because of the high percentage of FDI inflow, but because of infrastructure and manufacturing investments that have been consistent for more than five decades.

Even with Pheu Thai leadership, Thailand might still not be willing to take further steps in supporting the Biden administration’s new Indo-Pacific Economic Framework for Prosperity (IPEF). While it has resisted pressure from Beijing, if Srettha wants to pursue a free trade agreement with the EU, Thailand will need greater adherence to data protection and privacy. Thailand passed the Personal Data Protection Act (PDPA), a law that was borrowed from the EU’s General Data Protection Regulation (GDPR), but met with resistance from small to medium-sized enterprises and civil society groups who argued its draconian punishments might unfairly target smaller companies – non-compliance with the PDPA comes with fine up to 5 million baht or a year in prison. However, greater engagement with western countries and fostering regional cooperation might help better shape the pillars of the IPEF that Thailand supports, such as clean energy and supply chain resilience. The Kingdom, regardless of which political party takes power, will have to navigate legitimate concerns over the impact of free trade on sensitive sectors of the Thai economy, namely agriculture.

Finally, greater engagement with the United States and the EU might also bring about a shift in Thailand’s cautious position on the war in Ukraine. By abstaining from key votes on Ukraine in the United Nations, Prayut drew international condemnation by lobbying Russian President Vladimir Putin to attend the Asia-Pacific Economic Cooperation (APEC) Summit, while at the same time pleading for the return of Russian tourists to Thailand. 

The lessons that Thailand learned from the recent pandemic is that economic diversification is key to avoiding the kinds of shocks that ravaged tourism-dependent economies in the region. By prioritizing FDI inflow as a pillar of foreign engagement, Thailand would see benefits in more stable sectors, such as green energy and sustainable infrastructure, while adding investment in wider areas of the country, as opposed to existing investments that are concentrated in the Bangkok metropolitan area or along the Eastern Economic Corridor (EEC). A business-savvy Prime Minister like Srettha may consider altering Thailand’s pragmatic Ukraine policy in hopes of attracting investment from mature economies like Germany and Canada.

What’s past is prologue, and in the context of foreign policy, this brief reflection on both Pheu Thai’s 2011-2014 foreign policy and the stated goals of a leading candidate for Prime Minister are revealing. While it is difficult to determine if and when a new government will be formed, lessons from the recent past and stark contrasts with the Prayut era are insightful in forecasting Thailand’s foreign policy future.