The decision by the U.S. to suspend Generalized System of Preferences (GSP) treatment to Thailand, requiring all Thai exports to the U.S. to be subject to duties, has raised confusion among many sectors in Thailand.
Once trade preferences for Thai products are removed, Mr Jurin said that those products become subject to taxation of between 4% and 5%, making such products more expensive in the US market.
He said that, in the past, whenever trade benefits for Thai products exported to the US were suspended, Thailand appealed to the US adding, however, that it was at the US’s discretion whether to reconsider the suspension.
He played down the impacts of the US move, however, saying that, although US$1.8 billion worth of Thai exports were granted trade preferences by the US each year, only about US$1.3 billion worth of Thai exports actually applied for the benefits.
Mr Jurin said that, due to the taxation resulting from the removal of GSP privileges, Thai exporters will face costs, estimated at between ฿1.5 billion and ฿1.8 billion baht annually, should they wish to maintain the pre-change prices of its products in the US market.
A major issue for Thai exports
The Thai’s chief strategist Khunying Sudarat Keyuraphan, however, said that the suspension of trade benefits was a major issue which will heavily impact Thai exports to the US at a time when exports are already declining due US-China trade tensions and the strong baht currency.
She urged the Thai government to hold immediate talks with the US and to ascertain the actual reason for the US action against Thai exporters, while predicting unemployment in Thailand will increase, with as many as 500,000 Thai workers being laid off.
The Minister of Labour has called an urgent meeting to address the labour concerns cited by the U.S. as a factor in the decision to revoke trade preferences.
How the COVID-19 situation may affect Thailand’s export sector
Thailand’s export sector could face damage of 200-300 billion baht if the situation cannot be brought under control within six months.
The Thai National Shippers’ Council has raised a concern that the export sector might face a 200-300 billion baht toll should the COVID-19 situation not be brought under control in six months, urging the government to speed up the vaccine rollout to all segments of the population.(more…)
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