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Thai exports will suffer from Trump decision

Jack Burton

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Thai exports will suffer from Trump decision | The Thaiger
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US President Donald Trump announced on Friday that the US will suspend 1.3 billion dollars worth of duty-free trade for certain items from Thailand, claiming that Thailand has not taken steps to protect labor rights.

In a letter to US House of Representatives Speaker Nancy Pelosi and Vice President Mike Pence, Trump said he had suspended duty-free treatment because Thailand had not taken steps to “afford workers in Thailand internationally recognized worker rights.”

The US Trade Representative’s office said the move amounted to a suspension of 1.3 billion dollars in trade preferences under the Generalized System of Preferences (GSP) program. At present, the GSP program covers around 4.5 billion dollars worth of Thai exports.

The suspension, which will take effect in six months, affects about a third of Thai products included in the program, including all of Thailand’s seafood exports to the US.

While the list of products subject to GSP suspension has not been made available the absence of GSP preference is likely to dampen the already grim prospects of Thai exports this year.

Thai exports in 2019 are likely to see flat growth or even a contraction for the first time in four years, due to the gloomy global economy, the prolonged trade war between the US and China and the strong Thai baht, according to several economic think tanks.

Thai exports in September fell from the previous month, and declined by 1.4 percent compared to the same period last year. While the figure is better than the 4-percent drop from the previous month, it is worse than market expectations.

The US suspension does not come as a total surprise. Earlier this year, Thailand narrowly avoided being labeled a currency manipulator on the US Department of Treasury’s watchlist because Thailand did not meet the conditions set by Washington.

Thailand’s current account surplus accounted for over 7% of the country’s gross domestic product in 2018, against the limit set by the US Treasury of 2%. Moreover, the amount of foreign currency purchases did not increase from the previous year. Thailand’s trade surplus with the US was 19 billion dollars, approaching the limit of 20 billion.

While the US action toward countries labeled as currency manipulators isn’t clearly defined, Washington can unilaterally end the GSP benefits to take action against high trade deficits with its trading partners.

The US announcement will likely further impact Thai fishery business after an issue in the European Union (EU).

Even though the EU announced in Januarythe lifting of a yellow card for Thailand in recognition of its progress in tackling illegal, unreported and unregulated (IUU) fishing, Thailand’s fishery exports to the EU have not recovered to pre-IUU levels.

Thailand is the second biggest beneficiary of the US’s GSP, after India, which was the largest GSP beneficiary with 5.7 billion dollars in imports to the US in 2017. Washington decided to terminate India’s designation as a beneficiary developing nation in May this year.

A wide range of Thai export items currently receive GSP benefits. The biggest beneficiaries are electrical appliances and electronics like air conditioning and electronic components, and washing machines, followed by food and agriculture products and machinery.

The prospects for Thai exports are not promising. Last year, the USTR’s office accepted a petition from the National Pork Producers Council challenging Thailand’s eligibility for the GSP program.

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) also filed a petition to Washington to review of Thailand’s GSP eligibility, based on labor issues.

Thailand is the United States’ 20th largest goods trading partner, and two-way trade totaled USD44.5 billion in 2018. The U.S. goods trade deficit with Thailand was USD19.3 billion in 2018.

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Jack Burton is an American writer, broadcaster, linguist and journalist who has lived in Asia since 1987. A native of the state of Georgia, he attended the The University of Georgia's Henry Grady School of Journalism, which hands out journalism's prestigious Peabody Awards. His works have appeared in The China Post, The South China Morning Post, The International Herald Tribune and many magazines throughout Asia and the world. He is fluent in Mandarin and has appeared on television and radio for decades in Taiwan, Mainland China, Hong Kong and Macau.

Economy

Government considering another registration round for co-payment scheme

Maya Taylor

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Government considering another registration round for co-payment scheme | The Thaiger
PHOTO: Thai PBS World

The Finance Ministery is considering adding another registration round to the Khon La Khrueng (“Let’s Go Halves”) co-payment scheme, as 1.34 million rights have not yet been taken up. The government introduced the scheme last October, in an effort to stimulate the Covid-battered economy. Under the scheme, Thai citizens get a 50% subsidy on the purchase of food, drink and general products, up to 150 baht per person per day, to a maximum of 3,000 baht for the duration of the scheme. Those who sign up need to make purchases within 14 days of their registration.

The first phase got under way on October 23 and finished on December 31, with the government setting aside 30 billion baht to cover 10 million people. The second phase began on January 1 and runs until March 31, covering an additional 5 million people. The cap has also been raised from 3,000 to 3,500 baht.

Kulaya Tantitemit from the Fiscal Policy Office says that of the combined 15 million rights, 13.66 have been taken up. The Bangkok Post reports that those who have not received subsidy rights can register for the 1.34 million that remain by the end of this month.

The Finance Ministry is also considering a third phase of the scheme, based on the success of the first 2 phases, according to Minister Arkhom Termpittayapaisith.

SOURCE: Bangkok Post

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Economy

Thailand’s rich not eligible for 3,500 baht government handout

Maya Taylor

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Thailand’s rich not eligible for 3,500 baht government handout | The Thaiger
PHOTO: Chiang Rai Times

Thailand’s Finance Ministry has confirmed that wealthy citizens are not eligible for the government’s monthly cash handout of 3,500 baht. The Rao Chana (“We Win”) scheme consists of 2 monthly payments of 3,500 baht for those struggling with the financial fallout of the Covid-19 pandemic. Those with savings above a certain, unspecified threshold, will not qualify.

The ministry has not specified what this figure might be, in a bid to stop people transferring funds out of their accounts in order to fall below the required threshold. The Rao Chana scheme is aimed at farmers and the self-employed and is similar to the previous Rao Mai Thing Kan (“We Won’t Leave Anyone Behind”) scheme. That scheme consisted of 3 monthly payments of 5,000 baht and also excluded those with savings above a certain amount.

“The government spent 390 billion baht (on Rao Mai Thing Kan), but people still protested in front of the ministry after their applications to receive 5,000 baht remedial payments were rejected. A government official found that 1 protester had more than 10 million baht in his account, which is why he was not eligible.”

Kulaya Tantitemit from the Fiscal Policy Office, says screening under the new scheme will also reject government officials, employees in state enterprises, and people already in the social security net. The eligibility criteria are expected to be submitted for Cabinet approval soon, with registration for the scheme opening at the end of January and first payments made in early February.

“We want to help low-income people affected by Covid-19, so those outside the social security system such as freelancers or farmers will be eligible. But anyone with a high income will be disqualified.”

SOURCE: Nation Thailand

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Thailand

PM announces the distribution of 3,500 baht to help during Covid outbreak

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PM announces the distribution of 3,500 baht to help during Covid outbreak | The Thaiger
PM Prayut Chan-o-cha

PM Prayut Chan-o-cha announces the 3,500 Baht distribution to help people financially affected during this second major outbreak of Covid-19, including informal workers, freelancers, and the unemployed. At the same time, the government will also help reduce the cost of living expenses of all households nationwide including electricity and water bills in February and March. Special internet packages will also be provided to support people who need to work from home.

The 3,500 Baht distribution is part of the government’s urgent relief measures called “Rao Chana” project or “We Win” in Thai language. The money is planned to be distributed to the registered applicants by the end of January and early February. But the exact date for signing up for the project is not released yet, perhaps next week.

The electricity bill reductions will be applied to every household across the country for 2 months, February and March, with the first 90 units spent free of charge. The water bills for all households and small businesses will also be reduced by 10% of the total charges in the February and March invoices.

SOURCE: The Pattaya News| Post Today

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