Privilege use elates officials

Based on expansion figures for the first nine months, the Commerce Ministry is upbeat the use of free trade agreement (FTA) privileges and the Generalized System of Preferences (GSP) by Thai exporters will top US$70.8 billion (2.31 trillion baht) by year-end, up 9% from 2017.

Adul Chotinisakorn, director-general of the Foreign Trade Department, said exporters have done a better job of using FTAs and the GSP, with the use of privileges under the two schemes topping $55.7 billion in the first nine months of 2018, up 17.7% from same period last year.

The utilisation rate was 74.4%.

Of the total value, FTA privilege use reached $52.1 billion, up 18.9% from the first nine months last year, with shipments under GSP totalling $3.57 billion, an increase of 11%.

The highest volume of FTA use stemmed from the Asean FTA, totalling $19.9 billion, followed by Asean-China ($13.2 billion), Thai-Australia ($7 billion), Thai-Japan ($5.5 billion) and Asean-India ($3.32 billion). The Thai-Peru FTA saw the highest growth of use at 64.5%.

The trading partners with the most FTA privilege use were Chile, Australia, China, Japan and South Korea. Items that saw the most privilege use were trucks, rubber products, durian, cane sugar and petroleum.

Thailand has 13 FTAs in place, including the Asean-Hong Kong FTA and investment agreement scheduled to take effect in January 2019.

With respect to the US’s recent decision to remove its GSP on 11 Thai products earlier this month, Mr Adul said the department is scheduled to call a meeting with exporters of these items by late November to evaluate the impact. Exporters need to improve quality to increase competitiveness instead of relying on low production cost, he said.