BANGKOK (BLOOMBERG) - US President Donald Trump suspended US$1.3 billion (S$1.77 billion) in trade preferences for Thailand because of its failure "to adequately provide internationally-recognised worker rights", such as protection for freedom of association and collective bargaining.
The suspension, to take effect on April 25, will 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 US Trade Representative office said in a statement.
Eligibility of all Thai seafood products for the so-called Generalised System of Preferences will be revoked due to "longstanding worker rights issues in the seafood and shipping industries", the statement showed.
"I need more time to assess the impact as we just got the list of affected products," Pimchanok Vonkorpon, director-general of the Thai Commerce Ministry's trade policy and strategy office, said in a text message.
The US action comes even after Thailand took steps against fishing industry abuses, prompting the European Commission to lift the threat of a ban on Thai seafood.
Trade under the Generalised System of Preferences between Thailand and the US totalled US$4.8 billion in 2018.
Thailand's overall exports to the US totalled US$31.9 billion last year, according to data compiled by Bloomberg.
Prime Minister Prayut Chan-o-cha tightened up rules to curb illegal, unreported and unregulated fishing as well as forced labour, leading domestic trade bodies to complain that the laws are pushing up costs in a US$6 billion export industry that's already grappling with a surging currency.
South-east Asia's second-biggest economy is struggling to boost exports, especially shipments of agricultural products, amid challenges that include a strong currency and the ongoing US-China trade war.
Thailand's exports unexpectedly dropped for a second month in September, the commerce ministry said on Oct 21.
The baht reached a new six-year high against the US dollar on Oct 25. The currency has gained 7.9 per cent this year, more than any of its emerging-market peers except Russia's rouble.
While Thailand in May successfully dodged a US Treasury watchlist of foreign currency manipulators, it could find itself in the cross-hairs in a report due in coming weeks as its trade surplus with the US in the 12 months through August nears US$20 billion and its current account surplus remains above a 2 per cent threshold, two of three criteria considered.