The US-Thailand framework for an agreement on reciprocal trade is expected to establish a robust foundation for digital reciprocity, empowering American investments in Thailand — including strategic data centre deployments.
It could facilitate Thai enterprises’ expansion into the US market’s high-growth areas such as digital health.
However, it also raises concerns over the country’s competitiveness, data sovereignty and loss of future tax collection, according to legal and tech experts.
The United States and Thailand announced a joint statement on Sunday on the framework that would see the US maintain a 19% tariff on Thai products while identifying products where tariffs could potentially be adjusted or cut to zero.
The framework covers several trade issues, including that both countries will finalise commitments by Thailand to address barriers impacting digital trade, services and investment.
“It not only enables greater American investment in Thailand’s dynamic digital sector but also opens pathways for Thai digital enterprises to access the vast US market, promoting balanced growth in a rapidly evolving global digital landscape,” Dhiraphol Suwanprateep, an adjunct law lecturer at Bangkok University, told the Bangkok Post.
According to the framework, Thailand commits to avoiding digital services taxes or discriminatory measures against US digital services and products, ensuring free cross-border data transfers for business and supporting a permanent World Trade Orgnisation (WTO) moratorium on customs duties for electronic transmissions.
It will also ease foreign ownership restrictions in telecommunications and remove in-country processing requirements for domestic retail electronic payment transactions involving Thai-issued debit cards.
In the coming weeks, the US and Thailand will negotiate and finalise this agreement on reciprocal trade.
Mr Dhiraphol said these measures, alongside efforts to address state-owned enterprise distortions and enhance supply chain security, foster a level playing field for digital activities in both directions.
Relaxed telecommunications ownership limits allow American firms to invest in 5G networks, broadband infrastructure and joint ventures with local operators.
Fintech providers can eliminate processing barriers to deploy payment gateways, digital wallets and blockchain solutions, partnering with Thai banks to advance financial inclusion, Mr Dhiraphol added.
The commitment to free cross-border data transfers particularly benefits American businesses by enabling the establishment or utilisation of data centres in Thailand.
These facilities can serve as efficient regional hubs for data storage, processing and analytics, offering lower operational costs, reduced latency for Asean markets and compliance with trusted data flow standards.
US cloud providers and enterprises can thus optimise their global operations without mandatory localisation requirements.
Mr Dhiraphol said digital content creators, cloud service providers and e-commerce platforms benefit from non-discriminatory policies and data flow assurances, enabling investments in localised content, data centres and online marketplaces.
Emerging sectors such as cybersecurity and artificial intelligence (AI) offer collaboration prospects under national security frameworks.
Mr Dhiraphol said American entities should perform regulatory assessments, engage in trade dialogue and establish regional hubs to capitalise on these incentives.
OPPORTUNITIES KNOCK
He added that Thailand’s digital firms have new opportunities to expand into the US market, thanks to commitments on free data flows and non-discriminatory digital policies.
Thai fintech and e-commerce companies can now offer mobile payments, software-as-a-service and cross-border platforms directly to US users.
“Telecom operators from Thailand can explore US partnerships or launch subsidiaries, using their strength in affordable connectivity to serve niche or underserved markets,” said Mr Dhiraphol.
He said Thailand’s strengths in telemedicine, wearables, AI diagnostics and remote patient management — built on its universal healthcare and strong mobile infrastructure — can help address US gaps in rural access, chronic disease care and cost control.
Through secure data flow provisions, Thai platforms can integrate with US health record systems, enabling cross-border teleconsultations and remote monitoring.
Startups specialising in AI analytics and personalised wellness can co-develop Food and Drug Administration (FDA)-compliant tools with US partners.
Thailand’s expertise in medical tourism and health data analytics also supports backend and efficiency solutions for American providers.
To succeed, Thai firms should ensure regulatory compliance, pursue FDA clearance, join US accelerators and leverage intellectual property protections to attract venture capital and build credibility in the US market, Mr Dhiraphol said.
Suthikorn Kingkaew, advisor at Kasem Bundit University Research Institute, said the US and its technology companies favour a global solution under the OECD’s Two-Pillar Approach, which reallocates taxing rights to countries where customers are located and sets a global minimum corporate tax.
They argue that such a framework should replace unilateral measures. This perspective helps explain why digital taxation was addressed in the joint statement on the framework for a US-Thailand agreement on reciprocal trade, in which Thailand pledged not to introduce digital services taxes (DSTs) that would specifically affect US companies.
Several countries have introduced DSTs on foreign tech giants — France (3% in 2019), Italy (3% in 2020) and the UK (2%) — targeting revenues from digital ads, user data and online platforms.
These unilateral measures have created trade tensions with the US, underscoring the need for a global solution under the OECD framework, Mr Suthikorn said.
“In Asean, no country has imposed a direct DST,” said Mr Suthikorn.
Instead, members tax cross-border digital services through existing value-added tax or goods and services tax systems, ensuring equal treatment for domestic and foreign providers while avoiding friction with the US, Mr Suthikorn added.
Indonesia, Singapore, Malaysia and Thailand already apply VAT on digital services.
For Thailand, a regional, coordinated approach, such as a common framework or unified rate, would be more sustainable and diplomatically prudent, Mr Suthikorn said.
“Acting alone to impose a DST could draw scrutiny or even provoke trade retaliation from the US, which illustrates the need for careful diplomacy and alignment with both regional and multilateral partners.”
CONCERN ON COMPETITIVENESS
Eakachai Ruangrat, first vice-chairperson of the Senate Committee on Commerce and Industry, told the Bangkok Post Thailand has made a series of pledges under international digital trade frameworks that could reshape its digital economy.
“While these moves aim to attract foreign investment and promote open markets, they also raise concerns about competitiveness, data sovereignty and local industry resilience,” he said.
No discriminatory DST means Thailand has committed not to impose a discriminatory tax on US digital service providers such as Facebook, Google and Netflix, he said.
“The absence of such taxes may disadvantage Thai companies, which must compete with global giants operating under more favourable tax conditions,” Mr Eakachai said.
Moreover, Thailand has agreed not to restrict the transfer of data across borders, including customer information sent to overseas data centres. This benefits cloud computing, fintech and e-commerce firms reliant on international servers.
However, it may conflict with national data sovereignty goals and raise concerns over the security and control of Thai citizens’ data, Mr Eakachai said.
Meanwhile, Thailand supports the ongoing WTO moratorium on customs duties for electronic transmissions such as e-books, software downloads, music and videos.
This promotes free digital trade and benefits consumers through lower prices. On the flip side, it may reduce government revenue and put Thai content creators at a pricing disadvantage.
Mr Eakachai said if Thailand eases restrictions on foreign ownership in telecom businesses, this will open the door for US firms to invest in mobile operators and internet service providers.
“However, Thai companies may face heightened competition and increased risk of foreign takeovers,” Mr Eakachai said.