The US recently stunned long-time ally Thailand by revoking trade privileges worth US$1.3 billion (39.2 billion baht) under the Generalized System of Preferences (GSP), stirring up anti-American sentiment among locals online after the latest in a string of protectionist trade policies favoured by US President Donald Trump.
The US’s rationale for the move was Thailand’s failure to adequately protect worker rights.
You might also like
Set to take effect on April 25, 2020, the suspension covers 573 types of goods, with the Commerce Ministry’s Trade Policy and Strategy Office estimating that the goods would face a higher import tariff of 4.5%, leading US-bound exports to drop by an estimated $28.8-32.8 million next year, or 0.01% of overall exports.
The suspension means that the goods will no longer receive duty-free treatment and will face import tariffs of 4-5% or 1.5-1.8 billion baht annually, said Commerce Minister Jurin Laksanawisit.
With exports making up roughly 70% of the country’s GDP, losing GSP privileges is bad news for exporters, especially during a time when shipments have been flagging.
The US said the steps were triggered by concerns about workers’ rights, although some suspect that the suspension could stem from US concerns about its trade deficit with Thailand, the country’s ban on ractopamine — a feed additive commonly used by US pork producers — and most recently, the ban on glyphosate, a herbicide.
“The US’s GSP suspension is not the end of the world,” said Keerati Rushchano, acting director-general of the Foreign Trade Department. “We’re still able to export those products, but under the ‘most favoured nation’ tariff rate that averages 4.5%.”
