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Next step is to seek lower duties from US
PHUSADEE ARUNMAS
Thailand's shrimp exports are projected to be more promising this year after the World Trade Organisation's top court on Thursday affirmed its ruling against a US bond requirement for shrimp imports.
Poj Aramwattananont, president of the Thai Frozen Foods Association, said the ruling was definitely good news for the industry after it was hit by the anti-dumping penalties in 2003. But he said it would be hard to make a prediction on how far exports would increase.
According to Mr Poj, Thai shrimp production will be about 430,000 tonnes this year, a drop from 470,000 last year, because of rising raw material costs.
Shrimp exports are forecast at 350,000 tonnes, worth 80 billion baht, this year.
The US is Thailand's biggest market for shrimp, comprising 42-43% of exports, followed by Japan at 20%, the European Union at 15%, and Australia and Canada making up the rest.
The World Trade Organisation's top court on Thursday rejected a US appeal against an October ruling.
The US requirement that companies exporting shrimp to the country must post cash deposits to cover duties was a violation of global trading rules, according to the ruling.
In 2004, US Customs started to require exporters subject to anti-dumping duties - intended to counter the impact of unfairly priced imports - to post a bond covering the full amount as security if there was a risk of default.
The case turned on whether this was a reasonable security or an unfair burden imposed on exporters in addition to the anti-dumping duties already imposed. Thailand argued this requirement imposed an excessive burden on exporters already paying the duties.
Commerce Minister Mingkwan Sangsuwan said Thailand and the US would now negotiate import tariffs including the anti-dumping duty on Thai frozen shrimp, which stand at 5.29-6.82%.
Thailand will also ask the US to return a guarantee fund, called the Continuous Bond (C-Bond), worth more than 12 billion baht which Thai exporters paid to get access to the US market.
"The WTO ruling will benefit Thai Union, Charoen Pokphand and other Thai shrimp exporters," said Adisak Kamool, an investment strategist at KGI Securities in Bangkok. "The abolition of the US requirement will increase the competitiveness of Thai shrimp products in the US."
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