Thailand
Thailand: Trade perk cuts spur govt to act
The Commerce Ministry’s Department of International Trade Promotion has announced it will adopt seven measures to soften the impact of the US suspension of trade benefits for Thailand.
Somdet Susomboon, the department’s acting director-general, on Monday said the department has prepared the seven measures to mitigate the impact of the US action which will see US$1.3 billion (39.2 billion baht) of benefits under the generalised system of preferences (GSP) removed.
Set to take effect on April 25 next year, the suspensions cover a total of 573 types of goods which will no longer receive duty-free treatment and will face import tariffs of 4-5% worth 1.5-1.8 billion baht annually. The US has claimed that the suspensions were triggered by concerns over labour rights in Thailand.
“The first priority is to increase exports to the US over the next six months before the GSP cuts become effective,” said Mr Somdet.
During this period, US buyers are expected to stockpile their supplies of affected goods, particularly processed food, rubber products and electrical appliances.
He said the US has also decided to restore trade benefits to seven Thai products including fresh-cut orchids and cocoa powder, so the department will seek to expand the market share for these goods.
Another measure is to find new markets for the affected products, he said. India, Bahrain, Qatar, South Africa, Japan, the UK, the European Union, and Russia are among potential targets.
Due to the strong baht, Thai entrepreneurs in the agricultural industry and the processed food sector will be encouraged to invest in technologies to increase their competitiveness or invest in countries with which the US has free trade agreements, to gain access to the US market.
The other measures include beefing up trade roadshows and export promotion activities; promoting the use of national e-commerce platform Thaitrade.com and seeking partnerships with e-commerce firms to boost exports; and strengthening Thai brands by maintaining product quality and standards.
Mr Somdet said the GSP cuts are unlikely to affect this year’s export expansion target for the US market which is estimated at 4%, noting that exports over the first nine months account for 73-75% of the target.
Kirati Ratchano, acting chief of the Foreign Trade Department, said the government will spend the next six months negotiating with the US over the GSP suspension after the Asean and East Asia summits.
The negotiations will also proceed under the Trade and Investment Framework Agreement Joint Council, he said.
According to Mr Kirati, the department informed businesses of the possible GSP cuts late last year and suggested that they start seeking new markets and continue to improve their products to stay competitive.
Meanwhile, Prime Minister Prayut Chan-o-cha said on Monday the government is considering holding talks with the US representatives over the issue at the upcoming Asean Summit.
Gen Prayut also called on the public not to speculate as to why the US decided to remove the trade benefits, saying the US remains one of the country’s key trading partners.
“We’ll pursue talks on this. If it doesn’t work, it will be because it involves US laws. And try not to speculate about this or make connections. Don’t make it become a political issue. Don’t make it worse,” he said.
Source: https://www.bangkokpost.com/business/1781769/trade-perk-cuts-spur-govt-to-act