Thai officials headed to USTR for explanation on GSP cut

Thai trade and labour officials in Washington are scheduled to talk with the US Trade Representative (USTR) tomorrow about the recent decision to end preferential trade privileges for a range of Thai exports.

Commerce Minister Jurin Lasanawisit said yesterday that he instructed the officials to meet members of the USTR to improve understanding and provide more accurate information on trade and labour issues.

Last Friday, the USTR announced the suspension of US$1.3 billion (39.3 billion baht) in trade preferences for Thailand under the Generalized System of Preferences (GSP), citing a failure to adequately protect worker rights.

Set to take effect on April 25, 2020, the suspensions cover a total of 573 types of goods that the Commerce

Ministry’s Trade Policy and Strategy Office said would face a higher import tariff of 4.5%, leading US-bound exports to drop by an estimated $28.832.8 million next year, or 0.01% of overall exports.

The government will try its best to negotiate before the decision takes effect in April, Mr Jurin said. Officials also plan to consult with private sector operators affected by the preference elimination about ways to offset the impact.

“As part of the move to mitigate the impact, Thailand needs to step up shipments to 10 potential markets: China, India, Turkey, Germany, Sri Lanka, Bangladesh, the Middle East, South Africa, Britain and the EU,” he said. “Market expansion needs also to focus on individual markets and provinces in the target export destinations.”

When asked whether the GSP cuts would be discussed with the US on the sidelines of the Asean Summit, Mr Jurin said the matter has not been decided on, noting that the forum is all about Asean.

Keerati Rushchano, acting director-general of the Commerce Ministry’s Foreign Trade Department, said tomorrow’s talks will see Thai trade officials asking for an explanation for the GSP cut and how the two sides should pursue issues of concern.

“In practice, the US announcement is final,” he said. “Even if we succeed in the talks and the US agrees to reinstate GSP eligibility to Thailand, those rights will be effective from 2021, not next year.”

Although the US decided to cut the GSP eligibility for Thai goods, Thailand still has a chance to regain the rights, Mr Keerati said, noting that the US used the word “suspend” instead of “terminate”, the term it used for India and Turkey.