Commerce Ministry will appeal US GSP decision
Thailand will ask the United States to reconsider removal of trade preferences for Thai exports under the Generalized System of Preferences (GSP), according to the Ministry of Commerce.
In the past, whenever trade benefits for Thai products exported to the US were suspended, Thailand has appealed to the US, according to the commerce minister, who added that it is ultimately up to the US whether to reconsider the suspension.
Once trade preferences for Thai products are removed they are subject to tax of between 4% and 5%, making them more expensive in the lucrative US market.
He played down the impact of the US move, however, saying that although 1.8 billion dollars worth of Thai exports enjoy trade preferences from the US, only about 1.3 billion dollars worth actually apply for the benefits.
But one government strategist says the suspension of the benefits is a major issue which will heavily impact Thai exports to the US at a time when they’re already declining, due US-China trade tensions and the strong baht.
The same strategist urged the government to hold immediate talks with the US to determine the actual reason for the US action against Thai exporters (cited by the local news sources as slave labour and human trafficking in the fishing industry) predicting unemployment in Thailand will increase, with as many as 500,000 Thai workers being laid off.
The taxes resulting from the removal of GSP privileges, set to take effect in six months, mean Thai exporters could face costs of between 1.5 billion and 1.8 billion baht annually if they maintain the pre-change prices of their products in the US market.
Source: thaipbsworld.com
