Thailand-Myanmar Trade Declines Owing to Border Challenges

Thailand’s trade with Myanmar has taken a hit in February 2025, with total trade value dropping by 3.25% to 17.47 billion Thai Baht (US$487 million), according to the Department of Foreign Trade. This downturn, attributed to a crackdown on cross-border scam call-center operations, signals broader challenges at the Thai-Myanmar border, even as Thailand’s overall border and transit trade with neighboring countries shows robust growth.

Decline in Trade with Myanmar

The latest figures from the Ministry of Commerce paint a concerning picture for bilateral trade between Thailand and Myanmar. Exports to Myanmar saw a slight decline of 0.6%, amounting to 10.027 billion Baht (US$280 million), while imports dropped more significantly by 6.6%, totaling 7.443 billion Baht (US$208 million). The most striking impact was felt in the energy sector, with exports of diesel and other refined petroleum products plummeting by 61.0% to just 510 million Baht (US$14 million).

Arada Fuangthong, Director-General of the Ministry of Commerce, noted that despite the overall decline, exports excluding energy products showed resilience, growing by 7.1%. “We are closely monitoring the situation at the Thai-Myanmar border and remain committed to facilitating trade” she said. The department’s focus on non-energy exports suggests a strategic pivot to mitigate losses in key sectors, though the sharp drop in fuel exports raises questions about the sustainability of this approach amid ongoing border tensions.

Broader Border Trade Dynamics

While trade with Myanmar faltered, Thailand’s overall border and transit trade figures for February 2025 reflected significant growth, underscoring the country’s pivotal role as a regional trade hub. Total border trade surged by 19.9% to 154.354 billion Baht (US$4.3 billion), with exports rising by 20.8% to 86.020 billion Baht (US$2.4 billion) and imports increasing by 18.8% to 68.334 billion Baht (US$1.9 billion). This resulted in a trade surplus of 17.686 billion Baht (US$493 million), a positive indicator for Thailand’s economy in the first quarter of the year.

For the first two months of 2025, total border and transit trade reached 299.494 billion Baht (US$8.35 billion), marking a 10.9% increase compared to the same period in the previous year. Among Thailand’s neighbors, trade with Laos led the way at 28.078 billion Baht (US$783 million), up 8.4%, followed by Malaysia at 25.401 billion Baht (US$708 million), up 15.6%, and Cambodia at 15.594 billion Baht (US$435 million), also up 15%. Myanmar, despite the decline, remained a significant partner with trade valued at 17.470 billion Baht (US$487 million).

Key export items across these borders included diesel, valued at 3.355 billion Baht (US$94 million), alongside agro-industrial products and industrial goods. These figures highlight Thailand’s diverse export portfolio, which continues to drive economic engagement with its neighbors despite localized setbacks.

Transit Trade Growth and China’s Role

Beyond direct border trade, Thailand’s transit trade to third countries also saw remarkable growth, rising by 37.7% to 67.811 billion Baht (US$1.89 billion) in February. Exports in this category increased by 52.4% to 35.200 billion Baht (US$982 million), while imports grew by 24.8% to 32.611 billion Baht (US$910 million). China emerged as the dominant player in transit trade, accounting for 38.537 billion Baht (US$1.07 billion), a 55.5% increase from the previous year.

Key items in transit trade to China included high-value goods like hard disk drives, valued at 7.571 billion Baht (US$211 million), as well as TSNR block rubber and concentrated latex. For the first two months of 2025, total transit trade reached 129.154 billion Baht (US$3.6 billion), up 19.5%, reflecting Thailand’s strategic position in regional supply chains, particularly in technology and raw material exports.

Impact of Cross-Border Challenges

The downturn in trade with Myanmar cannot be divorced from the broader context of instability and enforcement actions at the border. Thai authorities have intensified efforts to curb illegal activities, including scam call-center operations that have proliferated in border regions. While these crackdowns aim to enhance security and protect economic interests, they have inadvertently disrupted legitimate trade flows, particularly in energy exports, which form a critical part of Thailand’s trade with Myanmar.

Analysts suggest that the decline in diesel exports may also reflect shifting demand dynamics within Myanmar, compounded by internal political and economic challenges. The country has faced ongoing turmoil since the military coup in 2021, with conflict and instability affecting trade routes and market access. For Thai exporters, navigating these uncertainties requires not only economic adaptation but also diplomatic engagement to ensure border stability.

Initiatives to Boost Trade

Despite the challenges, the Thai government remains optimistic about revitalizing border trade with Myanmar. Plans for the “Border Trade and Special Economic Zone Expansion Project: Border Trade Fair” in Mae Sot district, Tak province, are moving forward. This initiative, aimed at stimulating economic activity in border regions, could provide a much-needed boost to local businesses and traders who rely on cross-border commerce.

Mae Sot, a key gateway for Thai-Myanmar trade, has long served as a hub for goods and cultural exchange. Events like the upcoming trade fair are designed to strengthen economic ties and foster cooperation, even as security concerns persist. If successful, such initiatives could help offset the recent declines and rebuild confidence among traders on both sides of the border.

Regional Economic Implications

The contrasting trends in Thailand’s trade relationships with its neighbors highlight the complexities of regional economic integration. While trade with Laos, Malaysia, and Cambodia continues to grow, the decline with Myanmar serves as a reminder of how localized issues can impact broader economic strategies. For Thailand, maintaining a balance between security measures and trade facilitation will be crucial to sustaining its position as a leading economy in Southeast Asia.

Moreover, the significant growth in transit trade with China underscores the importance of global supply chains in driving Thailand’s economic performance. As demand for technology components and raw materials rises, Thailand is well-positioned to capitalize on its strategic location and infrastructure. However, over-reliance on specific markets or sectors could pose risks if geopolitical tensions or economic disruptions emerge.

Looking Ahead

As Thailand navigates the challenges of border trade with Myanmar, the coming months will test the resilience of its regional economic policies. The planned trade fair in Mae Sot offers a glimmer of hope, but sustained efforts to address security and logistical issues at the border will be essential. Meanwhile, the robust growth in trade with other neighbors and third countries like China suggests that Thailand’s economy remains on a strong footing, even as it contends with localized setbacks.

For businesses and policymakers alike, the question remains: can Thailand turn the tide on its trade relationship with Myanmar, or will ongoing border challenges continue to weigh on bilateral ties? Only time will tell, but the stakes for regional stability and economic growth are undeniably high.