Agreement on Reciprocal Trade Negotiations Enter Final Drafting, with Signature Possible in November 2026

Agreement on Reciprocal Trade Negotiations Enter Final Drafting, with Signature Possible in November 2026

Introduction

Negotiations on the Agreement on Reciprocal Trade between Thailand and the U.S. (the “ART”) have moved from agreement in substance to the preparation of the final legal text. On 7 October 2026, the Prime Minister stated publicly that the parties were working on the concluding paragraph of the instrument and that signature was anticipated during the U.S. President’s visit to Asia in November 2026.

The Prime Minister further disclosed that Thailand had received a letter from the U.S. President indicating that officials of both countries would settle the final text, with the expectation that the ART could be signed during that visit. Responsibility for the remaining negotiations has been assigned to the Deputy Prime Minister and Minister of Commerce.

Signature could take place at either of two events in November:

• the ASEAN Summit, to be held in the Philippines from 16 to 18 November 2026; and
• the Asia-Pacific Economic Cooperation (“APEC”) meetings, to be held in China on 18 and 19 November 2026.

The Scope of What Has Been Agreed

The Ministry of Commerce has confirmed that Thailand and the U.S. have reached agreement on the substance and governing principles of the ART, and that the outstanding work consists of technical details and legal drafting.

This characterization requires careful reading. The framework announced by Thailand and the U.S. in October 2025 (the “October 2025 Framework”) is a separate instrument from the ART, and neither determines the tariff rate applicable to Thai goods.

Under the October 2025 Framework, Thailand undertook to eliminate tariffs on approximately 99% of U.S. goods, while the U.S. proposed to maintain a reciprocal tariff of 19% on originating Thai goods, subject to a zero rate for selected products. U.S. tariff policy has since been reconstituted on a different statutory basis. Thai goods are currently subject to a Section 301 tariff of 12.5% arising from the forced labor case, and a separate investigation into structural excess capacity remains undetermined.

Thailand’s stated objective is that the aggregate tariff burden should approximate the former benchmark of 19% and should in no event exceed the burden borne by regional competitors.

Final Drafting Is Not Concluded

Three matters remain unresolved despite the advanced stage of the negotiations:

• The legal text is not settled. Final drafting determines the scope of commitments, exceptions and reservations, transitional periods, and the dispute settlement mechanism. These provisions ordinarily determine the commercial value of an agreement and are not ancillary to the principles already agreed.
• The Section 301 determination in the excess capacity case has not been issued. Section 301 proceeds by discrete cases, and the resulting rates are cumulative. Any rate arising from that case will therefore be added to the rate applicable under the forced labor case, not substituted for it.
• Signature is not entry into force. An instrument of this scope will require the completion of domestic approval procedures in Thailand before it takes effect, and parliamentary approval should be assumed to be required. Preferential treatment should not be anticipated from the date of signature.

The Commercial Context

Bilateral trade has expanded throughout the period of tariff uncertainty, and Thailand’s trade surplus with the U.S. has grown faster than trade itself.

• 2024: The surplus was USD 35.616 billion, an increase of 23%. Bilateral trade totaled USD 74.272 billion, up 10%. Thai exports reached USD 54.944 billion, up 14%, while imports were almost unchanged at USD 19.328 billion.
• 2025: The surplus reached USD 51.629 billion, up 45%. Bilateral trade rose 26% to USD 93.409 billion. Thai exports increased 32% to USD 72.519 billion, and imports increased 8% to USD 20.890 billion.
• First eight months of 2026: The surplus stood at USD 45.304 billion, up 44%. Bilateral trade reached USD 84.164 billion (approximately THB 2.701 trillion), up 42% on the same period in 2025. Thai exports rose 43% to USD 64.734 billion, and imports rose 40% to USD 19.430 billion.

The composition of that growth has changed. In 2024 and 2025, Thai exports grew far faster than imports from the U.S. In the first eight months of 2026, exports and imports have grown at almost the same rate: 43% for exports and 40% for imports.

The surplus is both the reason for the tariff measures applied by the U.S. and the principal matter the ART is intended to address.

The Composition of the Trade

Thai exports to the U.S. in the first eight months of 2026 were led by technology and industrial goods:

• computers, equipment and components: USD 20.525 billion, up 72%;
• telephones, facsimile equipment and related components: USD 7.637 billion, up 146%;
• rubber products: USD 2.788 billion, down 11%;
• transformers and components: USD 2.431 billion, up 38%; and
• machinery and mechanical parts: USD 2.335 billion, up 40%.

Imports from the U.S. were led by energy and capital goods:

• crude oil: USD 5.230 billion, up 80%;
• natural gas: USD 1.959 billion, up 140%;
• aircraft, gliders and aviation equipment: USD 1.602 billion, up 229%;
• machinery and components: USD 1.269 billion, down 10%; and
• chemicals: USD 997 million, up 21%.

Two observations arise from these figures. First, the growth in energy imports is consistent with the October 2025 Framework, which contemplated Thai purchases of U.S. liquefied natural gas, crude oil and ethane. It suggests that commitments of that kind are being implemented ahead of signature.

Second, export growth is concentrated in electronics and communications equipment, a category particularly exposed to scrutiny of declared origin, given current U.S. attention to transshipment and to goods incorporating third-country inputs.

Conclusion

The negotiations are at an advanced stage, but the outstanding matters are not merely formal. The final text will determine the scope and durability of the commitments assumed on both sides. The Section 301 excess capacity determination, which lies entirely outside the bilateral process, will determine a component of the tariff burden that is additional to the rate currently in force. The completion of domestic approval procedures will determine when any preferential treatment becomes available.

The prospect of signature in November is therefore a significant development in the negotiations, not a resolution of the tariff position. Until the text is published and the Section 301 case is concluded, the applicable rate remains indeterminate, and businesses are best advised to plan against a range rather than a single figure.

Author: Panisa Suwanmatajarn, Managing Partner.

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