Jewellery unscathed by GSP

Gem and jewellery exports are likely to see a marginal impact from the US suspension of trade preferences for Thailand under the Generalized System of Preferences (GSP), says the Gem and Jewelry Institute of Thailand.

Duangkamol Jiambutr, director of the institute, said a study found only 22 minor items under four major groups of products have to pay the import tariff at a normal rate.

The four major products are genuine jewellery, goldwork or silverware, jewellery made from pearls and precious stones, and imitation jewellery.

Last year, outbound shipments of these four groups of products to the US were worth US$111 million (3.36 billion baht) or 8.2% of total gem and jewellery exports.

From April 25, 2020, this group of major products will be subject to the

US’s import tariff at an average of 5.8%, resulting in higher costs by an estimated $6.43 million.

Ms Duangkamol said other groups of gems and jewellery products remain intact, especially silver and genuine jewellery made from gold or platinum.

Silver and genuine jewellery made from gold or platinum that were deprived of the tariff privileges for a long time represented $832 million worth of exports last year, accounting for 61.4% of total gem and jewellery exports.

Silver jewellery charged a 5% tariff rate still managed strong growth of 13.1% last year to $545 million, reflecting Thailand’s competitiveness, while gold or platinum jewellery now facing a 5.5% tariff rate fetched $288 million last year, down 7.6%, she said.

Ms Duangkamol said diamonds, coloured gemstones and pearls still enjoy zero tariffs.

Last year, Thailand shipped $364 million worth of those three products, up 7.3% from a year earlier.

“Nonetheless, the GSP suspension will hurt Thailand’s tax competitiveness,” she said.

“More importantly, the strong baht will make Thai products more expensive. Product quality and standard maintenance is most important factor to retain the market share.”

Despite the tepid performance of the country’s overall exports, the International Trade Promotion Department forecast this September gem and jewellery shipments including gold would grow by more than 1% from last year’s $12 billion, which was up 4.7% from 2017.

Gem and jewellery exports including gold rank third in the country’s total export value, trailing automotive and auto parts, and computers and parts.

The industry employs more than 1.2 million workers nationwide.