BANGKOK (BLOOMBERG) - Trade-reliant Thailand said US President Donald Trump's decision to suspend some US trade benefits will affect only a small proportion of its exports.
The impact is expected to be limited and would cut annual export value by at most US$32.8 million (S$44.7 million) in 2020, the Commerce Ministry said in a statement Sunday (Oct 27). The US is Thailand's second-largest export market, and shipments were worth US$31.9 billion last year, data compiled by Bloomberg show.
The US said Friday it will suspend US$1.3 billion 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.
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.
The office said the suspension on Thai goods will take effect in six months and focus on products for which the US is a relatively important market for the South-east 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 Pcl, one of the world's biggest canned-tuna producers, said Sunday it doesn't expect a material operational impact from the US decision.
Trade under the generalised system of preferences between Thailand and the US totalled US$4.4 billion in 2018, according to the Office of the US Trade Representative.