FTA and GSP usage drops with exports

The use of free trade agreement (FTA) privileges and the Generalized System of Preferences (GSP) by Thai exporters fell by 12.6% year-on-year in January, in line with the country’s overall lower exports.

The Foreign Trade Department yesterday said the use of privileges under FTAs and the GSP by Thai exporters totalled US$5.04 billion in the first month of 2020.

FTA privilege use alone contributed $4.59 billion, down 13.6% year-on-year from January 2019, and shipments under the GSP made up $452 million, down 0.4%.

Keerati Rushchano, the department’s director-general, said the drop stemmed largely from the global economic slowdown, the continued trade war and the pandemic. These factors affected not only trade, but also tourism and the overall global economy.

The department advised businesses that want to export to Asean to request a certificate of origin electronically (e-Form D).

As the chairman of Asean last year, Thailand succeeded in convincing Brunei, Cambodia, Myanmar, Laos and the Philippines to connect their e-Form D to the Asean Single Window (ASW) systems, which have been effective since Jan 20 this year, Mr Keerati said.

Asean members can use e-Form D to request a deduction or exemption from import tariffs for trade in Asean.

Mr Keerati said the top five export markets with the highest use of FTA privileges were Asean, China, Japan, Australia and India.

The Thai-Asean FTA continued to see the highest volume with $1.72 billion in January, as the Thai-China FTA totalled $1.04 billion. Thai-Japan privileges were worth $652 million.

The values for the Thai-Australia and

Thai-India FTAs were $531 million and $348 billion, respectively.

The top five items making use of FTA privileges were trucks, natural rubber mixed with synthetic rubber products, longan, rambutan, and petroleum and bitumen-based fuel.

Thailand has 12 FTAs in place, excluding the Thailand-New Zealand FTA that requires self-declaration for proof of origin.

Mr Keerati said the US retained the highest rate of GSP use, making up $418 million, followed by Switzerland ($19.3 million), Russia ($12.6 million) and Norway at ($1.71 million).

The GSP is used for trade with the US, Switzerland, Russia and Norway. Japan removed preferential tariffs for Thai products on March 31 last year.

Products that saw the highest application of GSP privileges were rubber gloves, drinks, air conditioner parts and electric transformers.