InfoQuest, (June 04, 2019) -- Thai National Shippers' Council cut its 2019 export growth forecast to 1 percent. The reference exchange rate was at 33.0 (+/-0.5) baht against per U.S. dollar. The rate of baht to U.S. dollar on May 31, 2019 was 31.56, with a fluctuation from 31.5 to 31.9 baht per U.S. dollar.
In April 2019, the exports registered 18.5556 billion U.S. dollars, down 2.6 percent year-on-year, while the imports reached 20.0129 billion U.S. dollars year-on-year. From January to April 2019, the overall exports of the country totaled 80.5434 billion U.S. dollars, down 1.9 percent year-on-year, while imports topped 79.9939 billion U.S. dollars, down 1.1 percent year-on-year.
There are several main risks hindering Thai exports.
A global economic slowdown had affected consumers' purchasing power. According to the evaluation of the World Trade Organisation (WTO), it suggests that global trade is experiencing evident slowdown.
A prolonged U.S.-Sino trade dispute and the fourth round of additional tariffs have also weighed on the contraction of exports. The U.S. imposed additional tariffs on China's products worth 250 billion U.S. dollars and China fought back by announcing tariffs on American exports reaching 60 billion U.S. dollars, forcing Thailand to find new channels to export goods to replace the markets of the two superpowers. And trade measures taken by the U.S. against other countries has affecting global trade. For example, the U.S. imposed 5 percent additional tariffs on Mexico, on the ground to punish it for it failed to stop the flow of migrants. It also banned oil purchase from Iran, enforced blockade and arms embargo on North Korea, and announced to remove India from Generalized System of Preference (GSP), as well as withdrew from the Paris Agreement. The latest news about the trade war is that China has stopped buying U.S. soybeans and haven't considered for a new round of soybean purchases.
The trade war between China and the U.S. has also disrupted investors' decisions to increase investment and relocate production bases, which has further slowed exports of parts from Thailand to the U.S. and China for assembly purpose.
Although the current trade war presents an opportunity for Thai products to seize the market share of China and the U.S., and exporters have made great efforts to develop branding and quality to meet the requirements from the export markets, unfortunately, the domestic laws and regulations of Thailand get in the way for exports.
When it released export data last time, the shipping body has already cut its forecast for 2019 exports to 3 percent from the previous figure of 5 percent.
The National Shippers' Council has developed "international trade promotion strategy" as a key recommendation for the new government to address trade barriers.
This strategy includes efforts to develop new trading markets and negotiate free trade agreements with major trading partners.
E-commerce platform will be established to promote the development of international trade.
At the same time, the capacity of people involved in exports will be enhanced so that they can adapt to the current trade situation.
The council will also strive to develop infrastructure and improve logistics efficiency, as well as create a stable financial and exchange rate environment.
Meanwhile, it will promote the development of important factors of production for trade and investment.
And a well-established law system will be provided to keep in line with the current economic environment.
Source: InfoQuest, by Tanawat Suayaem / Rachada / Wilawan, translated by Xinhua Silk Road
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