Thailand’s Commerce Ministry has said the United States decision to suspend some trade benefits will affect only a small proportion of its exports. The CEO of Thai Union, a major canned tuna producer, has also downplayed the move.
The impact is expected to be limited and would cut annual export value by at most 1 billion baht in 2020, the Commerce Ministry said in a statement Sunday. The US is Thailand’s second-largest trade market, and shipments were worth 962 billion baht last year, data compiled by Bloomberg show.
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The US said Friday it will suspend $1.3 billion of trade benefits under the generalized system of preferences, and that Thai seafood products will be removed from the program. It said the steps were triggered by concerns about workers’ rights, athough 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.
Thai exports have struggled this year because of the strength of its currency and the fallout of the US-China trade war. The nation is on course for the slowest economic expansion in five years.
The generalised system of preferences provides preferential duty-free treatment for thousands of products to bolster the economies of developing nations, according to the Office of the US Trade Representative (USTR).
The office said the suspension on the trade of Thai goods will take effect in six months and focus on products for which the US is a relatively important market for the Southeast Asian nation, but where Thailand accounts for a relatively small share of US imports.
The eligibility of all Thai seafood products for the program will also be revoked due to “longstanding worker rights issues in the seafood and shipping industries,” the office said.
Thai Union Group Plc, one of the world’s biggest canned-tuna producers, said Sunday it doesn’t expect a material operational impact from the US decision. “At this time, I do not foresee this decision by USTR as having an impact on our business,” Thai Union’s chief executive officer Thiraphong Chansiri said. Thai Union is one of the world’s biggest canned-tuna producers and its brands include Chicken of the Sea and John West.
Trade under the generalized system of trade preferences between Thailand and the US totalled $4.4 billion in 2018, according to the Office of the US Trade Representative.
Source: Bangkok Post, Bloomberg