Commerce Ministry wary of US imbalance inquiry

The Commerce Ministry has called an urgent pre-Songkran meeting with Thai exporters to look into the implications of US President Donald Trump naming 16 countries as culprits in his country’s trade imbalance.

Commerce Minister Apiradi Tantraporn said yesterday that she will request a meeting with Thai exporters and importers, US investors in Thailand, and government officials to discuss Mr Trump’s executive order signed last Friday.

In the executive order, the president ordered an investigation into the US trade imbalance and vowed to reverse the country’s trade deficit.

Thailand was one of three Asean countries named, along with Vietnam and Indonesia.

Mrs Apiradi said trade officials are studying the possible impact of the order and of upcoming measures that may affect Thailand, especially in the sensitive areas of intellectual property, tax and nontax privileges.

No short-term impact is seen, she said, and the ministry is maintaining is 5% export target for 2017.

“We will discuss the potential effects of the [executive] order but we have to sort it out alongside the private sector as soon as possible,” Mrs Apiradi said. “What we have to do now is to look through which goods and service we export there and what we import from there and prepare to handle the impact on each item once the US imposes any measures. We have to ask the US trade representative (USTR) about the issue first, then we can assess the next moves.”

She said Thailand has strong trade relations with countries across the world, adding that the baht’s recent appreciation is proof that Thailand has fair trade policies and does not interfere with exchange rates, even though the appreciation is negatively affecting Thai exports.

Most Thai exports to the US are the semiproduced, and undergo further processes before the finished products are sold. Thailand has been proactive in expanding its investment in the US recently, mostly in the food processing industry such as stableshelf tuna and shrimp farms.

In April, the US will announce the intellectual property watch list review, in which Thailand has remained in the priority watch list. Mrs Apiradi said that she hopes to see the US considers in the good relations between two countries in the review, as well as the potential for the two countries to increase mutual benefits in the future through a strategic partnership.

Pimchanok Vonkorpon, director of the ministry’s Trade Policy and Strategy Office, said Thailand insists on maintaining a strong trade relation with the US in terms of trade, investment, financial and security and has a clear policy to not intervene with the Thai baht’s movements despite the currency’s recent spike against the greenback.

Yesterday at the Trade and Investment Framework Agreement Joint Council meeting between Thai trade officials and 10 USTR delegation members, led by Barbara Weisel, in Bangkok, Mr Trump’s order was brought up, said Boonyarit Kalayanamit, director-general of the Trade Negotiation Department, who led the Thai official at the discussion.

Mr Boonyarit said Ms Weisel responded to queries, but he declined to give further details, saying the Thai team needs time to gather information and assess the situation first.

Nopporn Thepsithar, president of Thai National Shippers’ Council, said big exporters are unlikely to feel the pinch but smaller firms are too weak to handle the unexpected incident.

Mr Nopporn said, “We can’t use the old approach in which we would normally ask for time to scrutinise the issues. We also have to look at new markets.”

Thailand is has the 11th largest trade surplus over the US, worth a total US$18.9 billion last year. In January the surplus grew 6.5% to $1.54 billion from January 2016.