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InfoQuest

Thai Ministry of Commerce attributes clothing export growth to FTA

August 05, 2019


Abstract : Ms. Onmon Subthawitham, director-general of the Department of Trade Negotiations (DTN) of the Ministry of Commerce revealed that Thailand's clothing exports rose despite a worrisome global trade situation.

InfoQuest (August 05, 2019) --Ms. Onmon Subthawitham, director-general of the Department of Trade Negotiations (DTN) of the Ministry of Commerce revealed that Thailand's clothing exports rose despite a worrisome global trade situation. In the first half of 2019, Thailand's clothing products exported to the global market registered 1.2412 billion U.S. dollars in total, an increase of 2.38 percent over the same period of 2018. The exports saw an increase included ready-to-wear clothes, stockings and socks, and canvas gloves, which grew by 3.12 percent, 6.58 percent and 2.44 percent respectively. And the major export markets were the United States, EU, Japan, ASEAN and China.

Against the backdrop of global economic turmoil, there are still many factors contributing to the growth of Thailand's clothing industry. For example, the industry in the country boasts a comprehensive production system covering the upstream sector to the downstream sector and is able to manufacture products of high quality, which are widely recognized in the global market. Another important factor is that Thailand has signed 13 free trade agreements (FTAs) with 18 countries and regions, among which 15 FTA partners (ASEAN member states, China, Japan, Australia, New Zealand, Chile and Hong Kong (China)) have lifted import tariffs on all Thai clothing products. Another two countries including South Korea and India, have already removed import tariffs on most Thai clothing products, but are still imposing import duties on a small part of products. Peru is the only country without an open market for clothing imports, and only safety gloves are allowed to be imported without import duties. When comparing clothing exports before the FTAs went into effect and that in 2018, it was found that Thailand saw an increase in clothing exports to almost all of its FTA partners. Notably, the exports to China grew by 1800 percent, and then South Korea by 109 percent, Australia by 104 percent, New Zealand by 97 percent, Japan by 77 percent, ASEAN by 51 percent and India by 21 percent.

Ms. Onmon said the DTN will push partner countries to open wider clothing markets to Thailand within the framework of various FTAs, which includes the review of the existing FTAs and efforts to push the ongoing FTAs, such as negotiations on Regional Comprehensive Economic Partnership (RCEP), the FTA between Pakistan and Sri Lanka, as well as the FTAs with other partners in the future. Notably, the EU currently has the intention of resuming negotiations on the FTA. These FTAs will help reduce trade barriers and provide preferential benefits through import tariff and non-tax measures. In addition, they can also help promote ASEAN's Origin Accumulation, so as to expand the market and create competitive opportunities for Thai enterprises.

The increase in Thailand's clothing exports can also be attributed to the fact that the United States and China keep raising taxes on each other's clothing and textile exports. According to the export statistics over the first six months of 2019, Thai clothing exports to the United States represented 453 million U.S. dollars, up 8.52 percent, and the exports to China reached 64 million U.S. dollars, up 40.62 percent.

"Apart from the tax incentives of FTAs, enterprises should carefully study the product standards in each country, maintain the quality of product craftsmanship and sewing, and improve the competitive edge of products. For example, they can develop technologies and design modern products to meet market demands. Or they can create unique products and improve product value through innovation, such as manufacturing clothing with fibers having special properties to enable the products to realize functions of  UV protection and body humidity increase, thus promoting sustainable growth of Thai clothing products in the world market", said Ms. Onmon.

Source: InfoQuest, by Nisarat Wichiensri / Rachada, translated by Xinhua Silk Road. 

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Keyword: FTA Thailand's clothing exports

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