Border closure with Cambodia threatens Thai economy, cross-border trade under pressure

The ongoing tensions along the Thai-Cambodian border—sparked by a military clash near Nam Yuen District in Ubon Ratchathani on May 28—have escalated into a broader border dispute with no clear resolution in sight.

Cambodia has proposed taking the dispute to the International Court of Justice (ICJ), while Thailand opposes international arbitration, preferring to resolve the matter through the bilateral Joint Boundary Commission (JBC) mechanism.

In response, Thailand has implemented initial countermeasures, including temporary border checkpoint closures. This move is already affecting cross-border trade between the two countries, which has seen consistent growth over the past five years (2020–2024). Key border checkpoints facilitate trade worth nearly 200 billion baht annually.

According to the Department of Foreign Trade, the value of Thai-Cambodian border trade in 2024 reached 175.53 billion baht. Of this, exports totalled 141.85 billion baht, while imports stood at 32.68 billion baht, resulting in a trade surplus of 109.16 billion baht.

Major Thai exports include beverages, auto and motorcycle parts, engines, and agricultural machinery—accounting for over 30% of total exports. Key imports from Cambodia include cassava, scrap metals (aluminium and copper), and electrical wires—crucial for downstream Thai industries like animal feed, recycling, and electronics.

There are currently 18 Thai-Cambodian border checkpoints spread across seven provinces: Trat, Chanthaburi, Sa Kaeo, Buri Ram, Surin, Si Sa Ket, and Ubon Ratchathani. These include 8 permanent checkpoints, 9 for trade facilitation, and 1 for tourism.

At present, 16 checkpoints remain operational, while two are closed—Ban Muen Dan (Trat, for trade) and the Phra Viharn access point (Si Sa Ket, for tourism). These closures are not yet affecting overall trade, according to the Department of Foreign Trade.

However, the top three trade checkpoints (as of 2024) are:

• Aranyaprathet Customs House (Sa Kaeo) – 110.72 billion baht (63.4% of total trade)
• Khlong Yai Customs House (Trat) – 29.29 billion baht (16.8%)
• Chanthaburi Customs House (Chanthaburi) – 26.62 billion baht (15.3%)

If these three were to close, over 95.5% of border trade with Cambodia would be disrupted. Including Chong Chom (Surin) at 6.08 billion baht (3.5%) and Chong Sa Ngam (Si Sa Ket) at 1.82 billion baht (1.0%), the combined trade volume would total 174.53 billion baht.

Should the closures last up to three months, small-scale cross-border businesses and trade markets would come to a halt. If extended to 3–12 months, investor confidence in the region could be significantly undermined.

As of April 2025, Thai-Cambodian border trade continued to grow, reaching a total value of 15.8 billion baht. Exports stood at 12.145 billion baht, up 10.94%, while imports reached 3.655 billion baht, a 36.28% increase. Thailand maintained a trade surplus of 8.49 billion baht for the month.

For the first four months of 2025 (January–April), total Thai-Cambodian border trade amounted to 64.612 billion baht, with 50.225 billion in exports and 14.387 billion in imports. This yielded Thailand a trade surplus of 35.838 billion baht.

However, a permanent or widespread closure of border checkpoints could have wider consequences beyond direct trade, potentially affecting the service sector and labour flows. A significant number of Cambodian citizens cross into Thailand for medical treatment, and border closures would disrupt the healthcare sector and related services. Moreover, a large Cambodian workforce is employed in Thailand, particularly in agriculture.

Ukrit Wongthongsalee, chairman of the Chanthaburi Chamber of Commerce, stressed the economic importance of the Ban Laem and Ban Phakkad checkpoints in Chanthaburi province. He warned that if the checkpoints remain closed for a week or more, economic losses could exceed 1 billion baht.

“It’s not just about trade value,” he noted. “There are also labour issues. Cambodian workers make up more than 80% of the agricultural labour force in Chanthaburi—handling fruit collection, sorting, and packaging.”

Thanavath Phonvichai, President of the University of the Thai Chamber of Commerce and Chief Advisor to its Center for Economic and Business Forecasting, said the Thai government’s checkpoint closures are only temporary and not intended to block imports or exports. Trade routes for goods remain open, and the impact on Thailand’s exports is currently limited to around 5–10%. 

However, if all border crossings were fully shut down, he estimated that economic losses could reach 10 billion baht per month.

He added that while the national macroeconomic impact remains limited for now, the local economies near the border are feeling the brunt. The situation requires close monitoring to determine how long it will persist.

As tensions between Thailand and Cambodia continue, prolonged uncertainty could severely disrupt the border economies of both nations and cause considerable hardship for local communities. It is hoped that the situation will de-escalate soon and normalcy can be restored.