Negotiations hang in the balance as ceasefire teeters
US President Donald Trump, who called for a halt to the fighting over the weekend as a condition for tariff negotiations, asked American officials to resume talks with Thailand and Cambodia after the agreement, according to media reports.
But the Royal Thai Army accused Cambodia of breaking the ceasefire, which took effect at midnight on Monday, as Thailand blocked incursions and protected its sovereignty in compliance with international rules, according to the Thai military.
This is good for Thailand as the country is viewed as being sincere in addressing the problem and following the agreement, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries.
"We are confident the final tariff rate will be lower than 36%. Perhaps we will gain a special rate," he said.
Thailand is struggling to talk US officials into lowering levies on Thai imports after Vietnam was granted a 20% rate, a significant drop from 46%.
Before the border dispute was used as leverage in tariff talks, it was unlikely the Thai tariff rate would fall from 36% to the same rate as Vietnam, said Tanit Sorat, vice-chairman of the Employers' Confederation of Thai Trade and Industry.
This is because Thailand is "not a beloved child" of America in this region, he said.
If Thailand does not secure a "special" tariff rate, it cannot compete with Vietnam, said Mr Tanit.
Vietnam has an advantage over Thailand in many areas, boasting an ample workforce of young adults and more free trade agreements, he said.
US tariffs and a tourism slowdown are expected to cause Thai GDP growth to tally 1.5-2% this year, excluding the impact of the territorial quarrel, Kobsak Pootrakool, senior executive vice-president at Bangkok Bank, told the Economic Reporters Association.
Pornnarit Chuanchaisit, president of the Thai Real Estate Association, said the property sector has its own setbacks, as new launches and new construction have plunged due to a weak domestic economy.
This means most developers are not affected by the relocation of some Cambodian workers, he said.
With fewer new launches, Mr Pornnarit said demand for labour is lower and worker flows from Myanmar and Laos continue to sustain the market.
"Both the working and living conditions of Cambodian workers in Thailand are better than anywhere else, and I would encourage foreign workers not to relocate to their home country," he said.
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