International trade is a key strategy for business growth, but it comes with complexities related to regulations such as FTA (Free Trade Agreement) and HS Code (Harmonised System Code), which help streamline transactions and enhance competitiveness.
FTA helps reduce or eliminate customs duties to promote trade, while HS Code is used to determine tax rates and compile trade statistics. Both are crucial for business expansion, especially in emerging markets like Thailand. This article will explain FTA and HS Code, along with their impact on real-world business applications, and introduce Siam Nistrans' specialised logistics services that can support businesses in succeeding in the global market.
Defining the meaning and basic concepts of FTA
FTA (Free Trade Agreement) is an agreement between countries or groups of countries aimed at reducing or eliminating customs duties and other trade barriers to stimulate trade and strengthen economic relations between the involved countries.
Key features of FTA include
● Reducing or eliminating customs duties
● Reducing non-tariff barriers
● Setting rules regarding the origin of goods
● Liberalising trade in investment and services
● Protecting intellectual property
Thailand is a member of ASEAN and has signed several important FTA agreements as of April 2025, as follows
1). Multilateral agreement
1. RCEP: Regional Comprehensive Economic Partnership
2. ATIGA: ASEAN Trade in Goods Agreement
3. AJCEP: ASEAN-Japan Comprehensive Economic Partnership
4. ACFTA: ASEAN-China Free Trade Area
5. AKFTA: ASEAN-Korea Free Trade Agreement
6. AHKFTA: ASEAN-Hong Kong, China Free Trade Agreement
7. AIFTA: ASEAN-India Free Trade Agreement
8. AANZFTA: ASEAN-Australia-New Zealand Free Trade Area
2). Bilateral agreements
1. JTEPA: Japan-Thailand Economic Partnership Agreement
2. TIFTA: Thailand-India Trade and Investment Framework Agreement
3. TAFTA: Thailand-Australia Free Trade Agreement
4. TNZCEP: Thailand-New Zealand Closer Economic Partnership
5. TCFTA: Thailand-Chile Free Trade Agreement
6. TPCEP: Thailand-Peru Closer Economic Partnership
Meaning and importance of HS Code
HS Code or Harmonised System Code is a six-digit product code defined by the World Customs Organisation (WCO), used to classify products for international trade.
HS Code plays a significant role in
● Classifying goods under a uniform international standard
● Compiling trade statistics and analysis
● Determining customs duties
HS Code has a hierarchical structure as follows
● The first 2 digits (Chapter): product category
● The 4 digits, including the Chapter (Heading): Further divided products into specific groups
● The 6 digits including the Heading (Subheading): Provide the most detailed internationally standardised classification
● Increasing Transparency in Trade
Using FTA and HS Code correctly helps increase transparency in business by:
○ Reducing trade costs, such as customs duties
○ Improving customs management
○ Making trade cost predictions easier
● Expanding Market Access
Using FTA and HS Code strategically helps:
○ Open opportunities to enter new markets
○ Strengthen competitiveness in existing markets
Customs permit services and consulting
Siam Nistrans provides the following services:
● Complete customs documentation support
● FTA and HS Code consultation
● Improving compliance with international trade regulations
Understanding and using FTA and HS Code correctly are essential tools that enhance a business's competitiveness globally. Siam Nistrans can help you use these tools effectively to propel your business forward in the global market.
For service inquiries, please contact
Tel: 02-261-1080～5 (EXT 237)
Website: www.th.nissin-asia.com
Website Profile: Siam Nistrans Co., Ltd.
Email: TRANSPORTATION@th.nissin-asia.com
