ASEAN Beat | Economy | Southeast Asia

An Upgraded ATIGA and the Impact of the Collapse of Thailand Plus One

Was the single market and production base a fantasy?

Under the “Thailand-Plus-One” strategy, Thailand’s neighbors, especially Cambodia, Laos, and Myanmar, have been taking on labor-intensive processes, receiving foreign investment by integrating with Thailand’s core production bases through cross-border production networks. This model has relied on daily roundtrips of components and intermediate goods based on the premise of eliminating tariffs and facilitating customs clearance through the ASEAN Trade in Goods Agreement (ATIGA).

However, this premise was shaken by the Thailand-Cambodian border conflict and closure in May 2025. With assembly-line production organized by the hour, a border closure can immediately translate into a risk of production shutdown, potentially casting Thailand Plus One as a high-risk strategy.

If this situation were to persist, it would be difficult for neighboring countries to upgrade their industries, boost incomes, and reduce regional disparities. To attract investment going forward, it will be essential to provide institutional guarantees that logistics can be maintained regardless of political tensions.

ASEAN member states agreed to the upgraded ATIGA in October 2025. It was the first major review of the agreement since it came into effect in 2010, and was an attempt to modernize the arrangement against a background of expanding intra-regional trade. Its key aspects include: (1) Enhancing transparency of non-tariff measures (NTMs)), (2) Full legal recognition of electronic certificates of origin (e-Form D), (3) Expansion of electronic document exchange through the ASEAN Single Window (ASW), (4) Promotion of authorized economic operator (AEO) mutual recognition arrangements (MRA), (5) Establishment of a dedicated chapter on micro, small, and medium enterprises (MSMEs), (6) Incorporation of alternative dispute resolution (ADR) mechanisms, and (7) Establishment of a framework for essential goods during humanitarian crises.

In particular, the new framework “Trade Rules That Work in a Crisis” is laudable for its commitment to transparency, consultation, and restraint in times of crisis as well as for its ambition for self-restraint in restricting trade in essential goods. Moreover, the deepening of digitization will increase the predictability of procedures in ordinary times and improve the efficiency of supply networks.

However, considering the experience of the Thai-Cambodian border closure, the upgraded ATIGA remains insufficient to prevent physical border closures. The humanitarian crisis framework emphasizes discussion and information sharing but does not have legally binding force to mandate maintenance of logistics corridors. That is, even though it demonstrates crisis preparedness, it has not reached a stage of preventing interruptions to logistics even during a crisis.

First, the transparency of NTMs and notification obligations strengthened by the upgraded ATIGA are effective in terms of normal regulatory measures, but they do not serve as rules that can directly prevent a full-scale border shutdown at times of military tensions.

Second, the crisis clause in the upgraded ATIGA states that it takes into consideration........

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