US trade blow 'no problem'

US trade blow 'no problem'

Govt says only tiny export share affected

Thai exports will have a limited impact from US President Donald Trump's decision to suspend some US trade benefits.
Thai exports will have a limited impact from US President Donald Trump's decision to suspend some US trade benefits.

US President Donald Trump's decision to suspend some US trade benefits for Thailand will have a limited impact on Thai exports, the Commerce Ministry told reporters on Sunday.

Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office under the ministry, said that only 0.01% of overall Thai exports would be affected by the changes to the Generalised System of Preferences (GSP).

Set to take effect on April 25 next year, the suspensions cover a total of 573 types of goods which Ms Pimchanok said will face a higher import tariff of 4.5% leading to exports to the US dropping to an estimated $28.8-32.8 million next year, or 0.01% of overall Thai exports.

"When the suspension takes effect, Thailand will no longer enjoy an advantage over its competitors and will face tougher competition," Ms Pimchanok said.

Deputy Prime Minister and Commerce Minister Jurin Laksanawisit said the US previously granted GSP benefits to Thai products worth a total of $1.8 billion, though Thailand has not made full use of the eligibility.

GSP-eligible goods that were actually exported to the US were only worth $1.3 billion, he said.

The suspension means the goods will no longer receive duty-free treatment and will face import tariffs of 4-5% or about 1.5-1.8 billion baht annually, Mr Jurin said.

Addressing the suspicion the latest US removal of Thai products from the GSP programme might be linked to the ban on the glyphosate, Mr Jurin said the US cited the lack of protection for workers' rights as a formal reason for the suspension, not the ban.

Mr Jurin said the suspension was the result of the US annual review of beneficiary countries of GSP benefits and Thailand can still petition the US to have the suspension lifted.

Labour Minister MR Chatu Mongol Sonakul on Sunday said the US move was a major concern for several ministries and insisted Thailand's labour laws provide protection for workers in line with international standards.

The US said on Friday it will suspend $1.3 billion (39.2 billion baht) of benefits under the generalised system of preferences, and that Thai seafood products will be removed from the programme.

It said the steps were triggered by concerns about workers' rights, although some suspect the suspension could stem from US concerns about its soaring trade deficit with Thailand, the kingdom's ban on ractopamine, a feed additive commonly used by US pork producers, and most recently, the ban on glyphosate.

A spokeswoman for the US Embassy in Bangkok, Jillian Bonnardeaux, told the Bangkok Post this action results from the closure of a GSP review of workers' rights in Thailand, which had been underway for six years.

"Despite the six years of engagement, Thailand has yet to take steps to afford internationally recognised worker rights in a number of important areas identified in a 2013 petition from the AFL-CIO, such as providing protections for freedom of association and collective bargaining," she said, adding that protecting worker rights is an eligibility criteria that all countries must meet to qualify for GSP benefits from the US.

"Our hope is that in announcing this action, we will incentivise Thailand to move forward with legislation and administrative enforcement actions related to worker rights that could lead to a reversal of the GSP action we are taking today," she said.

Do you like the content of this article?
COMMENT (32)