Thailand hopes to expand direct trade via the new North-South Economic Corridor (R3E), a 1,850-kilometre network of roads linking the southern Chinese city of Kunming to Bangkok. It has a target of US$1 billion over the next three years.

According to Deputy Commerce Minister Alongkorn Ponlaboot, who wrapped up a trade mission to China yesterday, the two governments pledged to work closer together to expand trade and investment after the R3E linking Thailand, Laos and Southern China was completed and officially opened.

The network is expected to boost direct trade of agricultural products and other goods to more than $1 billion over the next three years from an average of $250 million currently, said Mr Alongkorn.

Key exports to Yunnan province traditionally travelled by boat an include Thai jasmine rice, longans, tapioca chips, rubber, palm oil and processed seafood.

According to Mr Alongkorn, the Thai government has called on its Chinese counterpart in Kunming to facilitate plant quarantine services and negotiate with China's central government to allow the province to set its own rice import quota.

The yearly rice import quota is determined by the Chinese central government.

The Thai government also asked Kunming to ease import licence regulations on Thai fruits and vegetables.

Currently, Thailand needs to gain import licence approval for every province the kingdom exports to and for every type of Thai fruit.

"The negotiation on those issues is positive and we expect they will be addressed before the official visit of Thai Prime Minister Abhisit Vejjajiva to China in June this year," he said.

The new road network could be a springboard for processed seafood, Thai fruits and rubber to other regions of China. Thailand has the potential to become a regional distribution center for Chinese products to other ASEAN countries.

According to Vijit Yang, vice-president of the Thai-Yunnan Commerce Association, Chinese investors are showing interest in setting up a wholesale department store in Thailand to capitalise on the new road network. It would have an initial investment cost of about one billion baht. The department store would be used as a distribution and wholesaling hub to transport Chinese goods to ASEAN and also South Asian markets, said Mr Yang.