Mr. Adul Chotinisakorn, director general of the Department of Foreign Trade of the Ministry of Commerce (MOC), revealed that in the first five months (January to May) of 2019, the total utilization value of preferential export rights under FTA and generalized system of preference (GSP) in Thailand reached 30.66886 billion U.S. dollars, up 2.76 percent, and the utilization rate of preferential rights was 79.23 percent.
The total utilization value of preferential rights under 12 FTAs (excluding ASEAN-Hong Kong FTA) was 28.50361 billion U.S. dollars, accounting for 80.40 percent of the total utilization value of preferential export rights. In the first five months of this year, Thailand's export to its FTA partners increased 1.75 percent. Under the GSP system of the US, Switzerland, Russia-Commonwealth of Independent States, and Norway (Japan scrapped GSP treatment to Thailand on March 31, 2019), the total utilization value of preferential rights was 2.16525 billion U.S. dollars, accounting for 66.43 percent of total export value under GSP system, up 18.25 percent.
The top five export markets where the utilization value of FTA's preferential rights are highest include: (1) ASEAN, 10.28462 billion U.S. dollars; (2) China, 7.94708 billion U.S. dollars; (3) Australia, 3.47394 U.S. dollars; (4) Japan, 3.23811 billion U.S. dollars. (5) India, 1.95682 billion U.S. dollars. Peru has witnessed the highest increase rate in terms of the total utilization rate of preferential rights, which was 43.53 percent, followed by China, 12.73 percent, and New Zealand 9.44 percent.
The top five FTA frameworks with the highest utilization rate of preferential rights include: (1) Thailand-Chile 101.26 percent. (2) Thailand-Peru 98.79 percent. (3) ASEAN-China 98.73 percent. (4) Thailand-Japan 92.88 percent. (5) ASEAN-Korea 84.52 percent. The top five products with the highest utilization value of preferential rights include: truck, synthetic rubber products, cane sugar, fresh fruits, such as durian, guava, mango, mangosteen, and dried fruits.
The US is still an export market with the highest utilization rate of preferential rights under GSP, about 92 percent of the total utilization value of preferential rights under GSP, namely 1.98773 billion U.S. dollars. The utilization rate of preferential rights under GSP was 74.85 percent, and the total value of export products under GSP was 2.65578 billion U.S. dollars, up 12.86 percent. The top five products with the highest utilization rate under GSP included air-conditioning components, rubber gloves, non-alcoholic beverages, spectacle lenses, and glasses.
The total utilization value in the first five months of this year stood at 30.66886 billion U.S. dollars, accounting for 37.85 percent of the pre-set total utilization value of this year, namely 81.025 billion U.S. dollars, up 9 percent than that in last year, said Mr. Adul. Going forward, more attention should be paid to key factors that affect export, such as the US-China trade war, the economic slowdown in trading partner countries, the turbulence in international financial market, and the appreciation of baht. These factors might affect the utilization goal of preferential rights in 2019.
The Department of Foreign Trade has always paid attention to and studied the developments of trade war, including opportunities and risks of Thai export. After preliminary research, it found that ASEAN- China Free Trade Area (ACFTA) holds huge opportunities for Thailand. Therefore, Thai enterprises are encouraged to harness tariff preference for exports to grow export, and replace US products with Thai goods in Chinese market.
Though the Thailand-China bilateral trade in the first five months in 2019 dropped 3.38 percent, Thailand exported goods of 11.5991 billion U.S. dollars to China, dropping 8.73 percent. However, according to statistics of the Department of Foreign Trade, the utilization value of preferential rights under ACFTA increased dramatically, namely 98.73 percent in the total value of export products enjoying preferential rights, increasing 12.73 percent to 7.94708 billion U.S. dollars compared with the total utilization value of 7.04988 billion U.S. dollars and utilization rate 83.87 percent last year.
Judging from Form E application in the Department of Foreign Trade to enjoy tariff reduction and exemption, in the first five months of 2019, the most obvious growth in the total utilization value of preferential rights under ACFTA can be found in agricultural products and processed farm produce, especially fruits, including fresh durian, mangosteen, mango, longan, and coconut (with shell), and other farm products, such as meat, frozen chicken entrails, and frozen shrimp.
The Department of Foreign Trade will work to spread relevant knowledge among enterprises that might be affected, and take law-based measures to control import and prevent dumping (Bill in 2522). In case of dumping, relief measures will be taken; relevant enterprises can apply to the Department of Foreign Trade, which will take the above-mentioned relief measures if it reckons that domestic industries bear the brunt indeed; it will also track and monitor fake products that mimic original Thai products. The Department of Foreign Trade has discussed these issues with Thai Chamber of Commerce and the Federation of Thai Industries. It will be more strict in issuing C/O and explore the possibility of establishing e-warning system.
Source: InfoQuest, by Phana / Kasamarporn / Rachada, translated by Xinhua Silk Road
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