Commerce: US deficit is fair
Thailand insists that the country’s trade surplus with the US does not stem from unfair trade practices and that the figures are insignificant.
According to the report prepared by the Commerce Ministry for the US’s Office of the Federal Register on President Donald Trump’s executive order, Thailand’s trade surplus with the US is caused by normal trade and economic practices, not any unfair trade policies.
At Thailand’s cabinet meeting on May 9, the body officially acknowledged the March 31 executive order, whereby Mr Trump called for an omnibus report on significant trade deficits.
Thailand was named in an executive order as one of 16 countries Mr Trump wanted an investigation into, as he vowed to reverse his country’s trade deficit.
He said the US will assess the major causes of the trade deficit with the identified countries, weighing differential tariffs, non-tariff barriers, injurious dumping, injurious government subsidisation, intellectual property theft, forced technology transfer, denial of worker rights and labour standards, and other factors contributing to the deficit.
The US will also assess whether a trading partner is “directly or indirectly imposing unequal burdens on, or unfairly discriminating against, the commerce of the US by law, regulation, or practice, and thereby putting it at an unfair disadvantage”.
Pimchanok Vonkorpon, director-general of the Commerce Ministry’s Trade Policy and Strategy Office, which is coordinating the report, said Thailand already submitted its report detailing the factors causing its trade surplus with the US.
Thailand is also ready to send its trade officials to participate in the public hearing the US will hold on May 18.
“A crucial point is Thailand insists in the report that the trade deficit value is not substantially high, making up only 1.5% of the US’s total trade deficit,” she said. “In addition, US shipments to Thailand have not expanded much, as the US does not have a bilateral free-trade agreement with Thailand, while foreign direct investment from the US has decelerated.”
According to Ms Pimchanok, Thaimade products, including midstream products that add value to high-technology products in the US and agricultural raw materials imported by the US, also play a vital role in US economic development.
Many Thai investors have increased their investment in the US, employing more people in that country in the process, she said. Likewise, US investors have owned and operated services in Thailand for years, using the country as a production base for exports to markets in Southeast Asia and as part of a US value chain in Asia-Pacific, Ms Pimchanok said.
The US is Thailand’s third-largest trading partner after China and Japan. Twoway trade between Thailand and the US amounted to US$36.5 billion in 2016.