Thailand to appeal against US decision to suspend trade benefits

The suspension would affect 573 Thai product types exported to the US, such as seafood and agricultural produce.
The suspension would affect 573 Thai product types exported to the US, such as seafood and agricultural produce.PHOTO: EPA-EFE

US move, set to take effect next April, prompted by Thai failure to address issue of worker rights

Thailand plans to appeal against a move by the US to suspend trade benefits for the country, a senior government official said yesterday.

It was announced last Friday that President Donald Trump will suspend US$1.3 billion (S$1.7 billion) in trade preferences for Thailand due to the country's failure to address the issue of worker rights.

The suspension is to take effect on April 25 next year.

"We still have six more months for discussions," said Mr Keerati Ratchano, acting director-general of the foreign trade department at Thailand's Commerce Ministry.

The suspension would affect 573 Thai product types exported to the US, including seafood, agricultural produce, soya sauce, seeds, syrup, sugar, kitchen appliances, plywood, jewellery, gold, iron and stainless steel, the department said.

This accounts for approximately 70 per cent of Thailand's exports to the United States that are exempt from 4.5 per cent tariffs.

Re-imposing the levies will add 1.5 billion to 1.8 billion baht (S$ 67.8 million to S$81.4 million) to the prices of goods for US importers, said Mr Keerati.

Thai officials plan to discuss the issue with their US counterparts at a sideline event on the last day of the Asean summit that will be held in Bangkok from Oct 31 to Nov 4.

"We will do everything we can to solve this problem, including diversifying our markets to the Middle East, Eastern Europe and Africa. We will use all the channels we have to get new markets," said Mr Keerati.

The suspension would affect 573 Thai product types exported to the US, including seafood, agricultural produce, soya sauce, seeds, syrup, sugar, kitchen appliances, plywood, jewellery, gold, iron and stainless steel, according to the foreign trade department.

The US is Thailand's second largest trading partner after China, while Thailand is the US's 20th.

The US goods trade deficit with Thailand was at US$193 billion in 2018, according to official figures.

Thailand has been enjoying the tariff benefits given to developing and underdeveloped countries since 1976, according to the foreign trade department.

"The move to reconsider the benefits was set in motion in 2015, when the AFL CIO filed a complaint. To say that the decision was a surprise is not true. The department has been aware of it for some time and it has been working to prepare Thai exporters for the change," Mr Keerati said, referring to the largest US labour union federation.

 
 

In 2014, southern Thailand was turned into a Rohingya trafficking highway, prompting the US to downgrade the country's efforts in anti-human trafficking.

Media exposes in 2015 on rights abuses of foreign workers on Thai fishing boats and illegal fishing saw the European Union issuing a yellow-card warning to Thailand's multibillion-dollar fishery industry, a step before banning its seafood exports. The warning was lifted in January this year, following steps the Thai government took in tackling rogue fishing operations.

A version of this article appeared in the print edition of The Straits Times on October 29, 2019, with the headline 'Thailand to appeal against US decision to suspend trade benefits'. Print Edition | Subscribe