Trade Creation and Trade Diversion Analysis Between Thailand and Organization of the Islamic Cooperation (OIC) Countries

Abstract

The research objects to identify the goods that are likely to be successful in trade creation between Thailand and Organization of Islamic Cooperation (OIC) countries. Thai products directory which possess competitive advantages for exporting to the OIC are introduced by using Wisarn’s RCA Matching Approach. This study used data derived from Trade Map between 2016 and 2018 developed by The International Trade Centre UNCTAD/WTO (ITC). This consists of trading information between Thailand and 57 OIC trading partner nations. The results showed that 189 Thai exporting goods for OIC countries are needed to be promoted as it is 63% of the top 300 Thai exporting goods. The proportion of goods needed to be promoted for OIC is higher than those for RCEP. This reflected the potential for market expansion in the future, especially the fewer MII values of trading partners, the higher chance for Thailand's trading. The benefit of importing more goods from Thailand will be greater owing to its low level of Import Intensity Index. This can be inferred that the OIC countries have imported fewer goods from Thailand than from the other countries, so the trading opportunities for Thailand can be greater.