InfoQuest, (May 6, 2019) -- Since the per capita income of Thailand has been above the medium level from 2013 to 2015, Japan officially announced that it would cancel its generalised scheme of preferences (GSP) for Thailand from April 1, 2019. However, Thai exporters will not be affected because they are now turning to the preferential policies under two free trade agreements, namely the Japan–Thailand Economic Partnership Agreement (JTEPA) (JTEPA) and the ASEAN-Japan Comprehensive Economic Partnership (AJCEP), both of which would offer more preferential policies, according to Ms. Onmon Subthawitham, director-general of the Department of Trade Negotiations (DTN) of the Ministry of Commerce of Thailand.
In 2018, Thailand's export value leveraging preferences under the JTEPA and AJCEP totaled 7.566 billion U.S. dollars, a year-on-year increase of more than 9 percent, accounting for 30.3 percent of the total exports to Japan. In contrast, the export value leveraging GPS preferences was only 7.85 million U.S. dollars, accounting for 0.03 percent of the total exports to Japan. Only sorbitol products， excluded from the list of tax cuts under JTEPA and AJCEP, enjoyed GSP preferences.
In the past year, Thailand has exported only 1.5 million U.S. dollars worth sorbitol products to Japan, accounting for 0.006 percent of its total exports to Japan. After Thailand and Japan singed the two free trade agreements, Thailand's exports to Japan soared by more than 52 percent compared with 2006 before the signing.
Ms. Onmon said the JTEPA came into force on November 1, 2007, and after that Japan reduced the tariffs on 88.1 percent of Thailand's products to zero, such as textiles and clothing, petroleum and plastics, gemstones and jewelry, fresh and frozen shrimps, vegetables and processed fruits. The AJCEP came into effect on June 1, 2009, and after that Japan reduced tariffs on more than 87.1 percent of Thai products to zero, such as fresh vegetables and fruits, dried vegetables and fruits, curry paste, textiles and clothing, gems and jewelry, equipment parts. The preferential policies under the two free trade agreements have contributed to a 13 percent increase in exports to Japan in 2018.
In 2018, Japan became the second largest trading partner of Thailand, only next to China. In 2018, the total trade volume between Thailand and Japan reached 60.201 billion U.S. dollars, an increase of 11.24 percent over 2017. Thailand' exports to Japan totaled 24.942 billion U.S. dollars. The main products included automobiles, equipment and components, processed chicken, machinery and parts, computers and components, plastic products, plastic particles, electrical appliances and components, canned and processed seafood.
Thailand's imports from Japan totaled 35.2596 billion U.S. dollars. The main products included machinery and parts, steel, iron products, automotive parts and devices, electrical machinery and components, chemicals, circuit boards, other metal minerals, scrap metals, scientific equipment and tools.
Source: InfoQuest, by Phana / Kasamarporn / Rachad, translated by Xinhua Silk Road
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