Measures tightened amid trade circumvention fears

Measures tightened amid trade circumvention fears

The Foreign Trade Department has tightened measures regarding the issuance of a certificate of origin (CO) on Thai products at risk of circumvention by foreign companies.

A CO is an international trade document which declares where commodities or goods were manufactured.

Pitak Udomwichaiwat, director-general of the Foreign Trade Department, said his body recently announced 42 items suspected of circumvention by foreign companies using Thailand as a base for re-export, particularly to the US and the EU.

Circumvention refers to practices used by producers, exporters or assemblers to avoid payment of anti-dumping/countervailing duties imposed by the importing country.

Such practices include: making minor modifications to goods but leaving their essential characteristics unaltered; the export of goods (with minor modifications) from third countries; and the exporter reducing prices to skirt the full extent of dumping duties.

According to Mr Pitak, those 42 risky Thai products include: natural honey; tubes, pipes, and hollow profiles (of) iron; seamless iron tubes; stainless steel; sinks and wash basins; aluminium foil; hard disk drives; forged steel fittings; wooden cabinets; electric motors and generators; bicycles; glass fibre products; e-bike gearboxes; blades for saws of all kinds; and combined refrigerator-freezers.

Mr Pitak said aluminium foil and e-bikes, in particular, have been found to have a high risk of circumvention.

Aluminium foil exports from Thailand to the EU rose to 1.59 billion baht in 2021, up from 1.22 billion baht in 2020. For the first seven months of 2022, such exports were worth 1.21 billion.

The value of e-bike shipments to the EU soared to 844 million baht in 2021, from only 216 million baht in 2020, with the figures in the first seven months of 2022 tallying 184 million baht.

These 42 high-risk items are now subject to tariff hikes and anti-dumping measures by the US and EU.

According to Mr Pitak, following the announcement by the department, exporters who want the so-called Form CO to export high-risk product items are required to submit their request for the rule of origin quality inspection to the Foreign Trade Department.

Once their products are certified as locally made Thai goods, the exporters will be allowed to ask for the CO.

According to Mr Pitak, tightened measures will help prevent goods circumvention by foreign companies and reduce the risk of Thailand facing trade penalties by its partners.

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