Bangkok: The Trade Policy and Strategy Office (TPSO) indicates that the European Union (EU) is advancing its trade regulations across the supply chain, highlighting six critical areas: carbon footprint, sustainability verification, deforestation-free products, e-commerce, and packaging. Thai exporters are urged to adapt swiftly to these changes. Thai exports to the EU are anticipated to grow by 20% in the first half of 2026, while there is a risk of goods from countries not aligning with EU standards shifting their markets to ASEAN.
According to Thai News Agency, Mr. Nantapong Chiraleartpong, Director of TPSO, disclosed that the office has been closely observing developments in the EU's trade policies. It appears that global trade is evolving beyond mere price and cost competition, with an increasing emphasis on standards, sustainability, and transparency throughout the supply chain. The EU is revamping its trade regulatory framework, which encompasses raw material sourcing, production processes, imports, online trade or e-Commerce, and even packaging and environmental norms.
There are six pivotal regulations that Thai businesses need to monitor closely:
1. CBAM (Cross-Border Carbon Adjustment): A carbon adjustment mechanism applicable to certain imported goods.
2. CSDDD (Continuing Sustainability Assessment Law): This law assesses sustainability impacts throughout the supply chain.
3. EUDR (Union of Deforestation Reform): This law applies to seven product groups, including cattle, cocoa, coffee, oil palm, rubber, soybeans, and timber, along with related processed products.
4. E-Commerce Duty: From July 1, 2026, a flat customs duty of £3 per item will be imposed on goods valued up to £150 imported from non-EU countries.
5. PID for E-Commerce Products: From November 1, 2026, imported goods via e-Commerce must have a Product Identifier (PID) for better traceability and customs risk management.
6. PPWR (Packaging and Packaging Waste Regulation): This regulation mandates recycling standards, reduces unnecessary packaging, and controls substances that may affect health.
Mr. Nantapong noted that the EU is a strategically vital export market for Thailand. In the first half of 2026, Thai-EU trade reached US$25,365.4 million, a 16.1% increase. Thai exports to the EU were valued at US$15,464.8 million, a 20.0% increase, with imports from the EU valued at US$9,900.6 million, a 10.4% rise. This resulted in a trade surplus of US$5,564.2 million for Thailand, with the EU ranking as Thailand's fourth-largest trading partner, following China, the United States, and Japan.
The EU's regulations, such as CBAM, CSDDD, and EUDR, will come into effect for large and medium-sized enterprises from December 30, 2026, and for SMEs from June 30, 2027. Under the EUDR, importers or exporters must conduct due diligence and prepare a Due Diligence Statement (DDS) through the EU information system to ensure that goods are not sourced from deforestation and are legally produced in the country of origin.
The EU is also enhancing its customs systems and oversight of imported goods via e-commerce, notably low-value items, which are swiftly increasing in volume. Data from the European Commission suggests that low-value parcels entering the EU could rise from approximately 1.4 billion in 2022 to nearly 5.9 billion in 2025.
The downstream regulations under PPWR, effective from August 12, 2026, require packaging to be recyclable, reduce unnecessary use, and control substances that could affect health, such as banning PFAS in food contact packaging.
The EU's trade regulations offer both opportunities and challenges for Thai businesses, particularly in the food and agricultural processing, electronics, automotive, and e-commerce sectors. These businesses need to upgrade their supply chain standards, from raw material sourcing and production to information systems, traceability, and packaging.
Thai entrepreneurs, especially SMEs, should prepare with information, certification documents, and assess costs, including customs duties, taxes, transportation, and operating expenses, to plan exports. Concurrently, Thailand is expediting negotiations for a Free Trade Agreement (FTA) with the EU to enhance market access, reduce trade barriers, and boost the long-term competitiveness of Thai businesses.
Meanwhile, TPSO cautions Thailand to monitor trade diversion risks, as manufacturers from countries unable to meet EU standards may target ASEAN markets, raising competition from lower-priced imports, particularly via e-commerce. This could affect the competitiveness of Thai businesses, underscoring the need to elevate product standards and entrepreneurial capabilities alongside effective import regulation.