US move 'a retaliation' for toxin ban
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US move 'a retaliation' for toxin ban

Suspension of GSP prompts suspicion

US President Donald Trump's decision to suspend $1.3 billion (39.2 billion baht) in trade preferences for Thailand under the Generalised System of Preferences (GSP) has raised suspicion it is in retaliation for Thailand's ban on the use of herbicide glyphosate.

The suspension is based on Thailand's failure "to adequately provide internationally recognised worker rights", the Office of the US Trade Representative said.

Set to take effect on April 25, the suspension will focus on products for which the US is a relatively important market, but where Thailand accounts for a relatively small share of US imports, the office said.

Eligibility of all Thai seafood products for the GSP will be revoked due to "longstanding worker rights issues in the seafood and shipping industries", the office said.

However, a source from the export sector said that the suspension could stem from US concerns about its soaring trade deficit with Thailand.

The US has kept a close watch on Thailand over several issues including currency manipulation, and the progress of moves to allow US pork exports into Thailand, the source said.

Thailand has banned the use of ractopamine, a feed additive commonly used by US pork producers to enhance muscle leanness and growth rates for more than 15 years.

Thailand and the US earlier agreed to set up a joint committee to evaluate the impact on consumer health from the consumption of pork containing ractopamine.

And the recent ban on the use of glyphosate might have become the last straw, the source said.

The National Hazardous Substances Committee last week reclassified the status of three farm chemicals from Type 3 toxic substances to Type 4, which prohibits their production, import, export or possession.

Effective on Dec 1, the ban will cover herbicides paraquat and glyphosate and the pesticide chlorpyrifos.

With the ban, the US expects its trade deficit with Thailand to soar further, as Thailand's "zero-tolerance'' stance against the three toxic farm chemicals means imports of agricultural products such as fruit must be free of these chemicals, the source said.

As such, the US will export fewer goods to Thailand, causing its trade deficit with the country to rise, the source said, adding the lack of protection for workers' rights cited as a reason for the suspension was just a pretext.

The US embassy recently sent a letter to the prime minister and other cabinet ministers requesting a delay in imposition of the ban, and a review.

Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said the GSP suspension would deal a serious blow to the Thai export sector which is already reeling from the appreciation of the baht, predicted to breach 30 per US dollar next year, mainly because of Thailand's huge current account surplus.

Kalin Sarasin, chairman of the Thai Chamber of Commerce, said the government still has six months to hold talks with Washington to resolve the issue, adding the US has been running a trade deficit of about $20 billion with Thailand annually.

Asked whether the GSP suspension was linked to the ban on glyphosate, Mr Kalin said the private sector has supported the ban on the three toxic farm chemicals.

Mr Kalin said that during the next six months before the suspension takes effect, Thai exporters must adjust and diversify risks by looking for export markets in other countries, rather than relying on the US market.

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