Pact set to boost Thai-US ties

Thailand’s digital economy is expected to gain momentum through new trade initiatives under the US-Thailand framework for reciprocal trade and the development of the Asean Digital Economy Framework Agreement (DEFA).

Industry leaders said that aligning with US priorities positions Thailand as a more attractive hub for cloud service providers, technology infrastructure, and artificial intelligence (AI) investment.

However, they cautioned that while easing restrictions on US ownership in the Thai telecom sector could increase outlays, robust regulations are needed to prevent market dominance by large international telecom operators at the expense of local enterprises.

On Oct 26, the White House released a joint statement on the framework for the US-Thailand agreement on reciprocal trade. As part of the framework, both countries are to finalise commitments by Thailand to address barriers affecting digital trade, services and investment.

Thailand promises to refrain from imposing digital services taxes or measures that discriminate against US digital services or products, and to ensure the free transfer of data across trusted borders for the conduct of business.

Thailand will also ease foreign ownership restrictions in its telecom sector, and remove in-country processing requirements for all domestic retail electronic payment transactions for debit cards issued in Thailand.

Attracting the US

Supparat Singhara na Ayutthaya, general manager of DAMAC Digital, said the framework emphasises cooperation in supply chain resilience, investment security and strategic technologies, which will strengthen the policy backdrop for infrastructure like data centres.

Thailand may become a more attractive location for US cloud providers, hyperscalers or tech infrastructure investors, he said.

Mr Supparat said data centres rely on large volumes of IT hardware. Even though the framework focuses on trade between the US and Thailand, improved trade ties may lead to smoother imports of US equipment or better bilateral logistics and investment flows.

Paul Srivorakul, group chief executive of aCommerce, a Southeast Asia e-commerce aggregator, told the Bangkok Post that by allowing the free flow of data, Thailand is giving up some potential tax revenue in exchange for a major strategic advantage — attracting AI investment.

He said this trade deal is a smart strategic play for Thailand’s digital ecosystem.

“We are agreeing to forgo a new digital services tax. But we are trading that potential, small revenue for something much bigger: unprecedented access to US technology and investment, coupled with regulatory certainty,” said Mr Paul.

This commitment to ensuring the free transfer of data across trusted borders is the most crucial part, he said.

“Data is the essential fuel for AI. Without the secure, frictionless flow of large, high-quality datasets, global AI companies cannot operate their regional models effectively,” said Mr Paul.

By guaranteeing this, Thailand becomes instantly attractive to major AI firms and cloud computing giants looking to invest more into their data centres and regional hubs, he said.

This strategically positions Thailand as the most trusted and transparent digital hub in Southeast Asia.

This trust is essential for attracting Western tech firms who are seeking a secure alternative to the regional status quo, providing a vital counter-balance to excessive Chinese tech influence.

“Ultimately, this move makes Thailand a globally competitive choice for regional headquarters, directly challenging Singapore with our scale and new, frictionless rules,” said Mr Paul.

The AI-driven foreign direct investment and creation of high-skilled digital jobs will generate vastly more economic value and tax revenue than any unilateral digital services tax ever could, he added.

Mr Paul said the goal of easing foreign ownership in the telecom sector and removing payment processing requirements is to encourage US investment.

However, he said Thailand must ensure this move does not lead to market domination by a few large international players, stifling the growth of local Thai enterprises and digital entrepreneurs.

“The benefits of digital trade should also be carefully monitored to ensure they flow to the Thai economy and not just to foreign shareholders,” said Mr Paul.

NEW SATELLITE SERVICE

Nuttanai Anuntarumporn, chief executive of Interlink Telecom Plc, told the Bangkok Post that the National Broadcasting and Telecommunications Commission is expected to maintain the foreign share ownership limitation in the major telecom companies at the current 49%, as the telecom sector remains a strategic industry.

The American framework is expected to help US-based satellite service providers such as Starlink expand their presence in Thailand, he said.

Their services can complement existing fibre-optic networks, especially in rural and remote coastal areas where terrestrial infrastructure is limited, said Mr Nuttanai.

As cross-border data flows become more seamless, connectivity infrastructure will see exponential growth, benefiting local telecom operators and system integrators, he said.

“By mid-2026, several hyperscale data centres will be completed, leading to a significant increase in domestic and outbound data traffic, reinforcing both data sovereignty and regional digital integration,” said Mr Nuttanai.

DEFA AGREEMENT

Meanwhile, Commerce Minister Suphajee Suthumpun said she aims to conclude the DEFA negotiations within the first quarter of 2026, with a formal signing of the pact later that year.

Thailand is the chairman of the negotiations committee.

The agreement is to serve as a modern, comprehensive framework for digital economic cooperation that effectively supports Asean’s transition towards a digital economy.

The pact is expected to lift the region’s digital economic growth by almost 30%, reaching a value of more than US$2 trillion by 2030.

Source – Bangkok News