Exporters urged to cash in on Afta

[webfact]

Exporters urged to cash in on Afta

By PHUWIT LIMVIPHUWAT 
THE NATION

 

 

THE Department of Foreign Trade aims to increase the percentage of Thai businesses cashing in on tax incentives under the Asean Free Trade Agreement (Afta) to 70 per cent this year, up from 63.04 per cent in 2017.

 

“Our job is to let Thai people know that they have the opportunity to export to other Asean countries with tax incentives under the Afta agreement,” said Adul Chotinisakorn, director-general of the Department of Foreign Trade at the Ministry of Commerce. 

 

Adul said if businesses export without certification that their goods are from Thailand, they will not be eligible for tariff reduction under Afta.

 

The department aims to get the message out to Thai businesses that if they want to export to other Asean countries and benefit from the Afta tax incentive, they will need a certificate of origin. 

 

There are many types of certificates of origin, but the one used for intra-Asean trade is called “Form D”, he explained.

 

The total value of Thai exports that have benefited from the Afta tax incentive has increased from US$19.46 billion (Bt634.1 billion) in 2015 to $23.8 billion (Bt775.5 billion) in 2017. 

 

However, the total value of exports that would have been eligible for the Afta tax incentive in 2017 was worth $37.76 billion (Bt1.23 trillion), according to the Department of Foreign Trade. This figure shows a large number of businesses in Thailand that were eligible to exercise their Afta rights did not do so, Adul said.

 

The Department of Foreign Trade is promoting greater trade between Thailand and other Asean countries through the Young Entrepreneur Network Development (YEN-D) Programme.

 

“Business matching alone will not suffice to promote long-term business relationships between countries. No matter how good the roads and bridges are, it is of no use if there is no sense of community or close connectivity between investors of different countries,” Adul said.

 

The YEN-D programme is meant to facilitate the development of close friendship and ties between entrepreneurs and investors in Cambodia, Laos, Myanmar, Vietnam and Thailand (CLMVT) in order to foster healthy and long-term trade and investments between Thailand and its Asean neighbours, Adul explained.

 

In the first season in 2015, 30 entrepreneurs from Thailand and 30 entrepreneurs from a neighbouring country were selected to enter the YEN-D programme together, participating in group activities and project competitions with each group containing members from both countries, he said.

 

“Within just four days of the programme, entrepreneurs from both countries had become close friends as they cooperated in group projects and group activities,” Adul said.

 

The process was then repeated until entrepreneurs from each neighbouring country got the opportunity to join the YEN-D programme along with Thai entrepreneurs, from Thailand-Laos, Thailand-Cambodia and Thailand-Myanmar. In the first season, up to 240 entrepreneurs from Thailand and neighbouring Asean countries participated, he said.

 

The programme now has four seasons, with up to 1,200 entrepreneurs in the YEN-D network, Adul says. 

 

“In the past four years, the YEN-D programme has generated up to Bt3 billion in investment and trading value,” he said.

 

Source: http://www.nationmultimedia.com/detail/Economy/30354748

 

-- © Copyright The Nation 2018-09-19

[JungleBiker]

If I understand correctly, it is the exporter who has to spend time and money getting the Form D but it is the importer that benefits from the tariff savings (not the exporter). The importer can't force the exporter to get the Form D. 

[bluesofa]

Does this mean that all goods exported from Thailand to other AFTA members are eligible?

I got the impression enforcing the agreement needed both sides to agree to implement it.

I know this is import, not export, and correct me if I'm wrong, but I thought that Beer Laos was still taxed as it always used to be when importing to Thailand, as Thai customs don't accept it's part of the AFTA and still want their import duty?

 

[JungleBiker]

1 hour ago, bluesofa said:

Does this mean that all goods exported from Thailand to other AFTA members are eligible?

I got the impression enforcing the agreement needed both sides to agree to implement it.

I know this is import, not export, and correct me if I'm wrong, but I thought that Beer Laos was still taxed as it always used to be when importing to Thailand, as Thai customs don't accept it's part of the AFTA and still want their import duty?

 

 

Most but not all goods are eligible for tarrif-free imports. I don't know if beer is one that isn't, (perhaps to protect the mega rich shareholders of the Thai beer companies?). There is a website somewhere that gives details of what is covered or not. 

 

 

[Srikcir]

9 hours ago, webfact said:

if businesses export without certification that their goods are from Thailand, they will not be eligible for tariff reduction under Afta.

"The general rule is that local ASEAN content must be at least 40% of the FOB value of the good. The local ASEAN content can be cumulative, that is, the value of inputs from various ASEAN members can be combined to meet the 40% requirement."  https://en.wikipedia.org/wiki/ASEAN_Free_Trade_Area

This leaves a lot of the content coming from a nonASEAN member, ie., China.

 

[bluesofa]

3 hours ago, JungleBiker said:

 

Most but not all goods are eligible for tarrif-free imports. I don't know if beer is one that isn't, (perhaps to protect the mega rich shareholders of the Thai beer companies?). There is a website somewhere that gives details of what is covered or not.

Thanks for the reply. Yes, I can understand the corruption angle within Thailand, but don't know how it's accepted within the Asean group. Or is it maybe multi-national corruption going on?

 

I did try searching to try and find if beer was specifically covered or not, but had no luck.

I saw for example Australia and New Zealand had ASEAN agreements, and I think they're part of the group?

The way I read it there seems to be various agreements between specific countries, rather than one agreement covering everyone, although I may not have understood it correctly.

 

[Srikcir]

3 hours ago, JungleBiker said:

 

Most but not all goods are eligible for tarrif-free imports. I don't know if beer is one that isn't, (perhaps to protect the mega rich shareholders of the Thai beer companies?). There is a website somewhere that gives details of what is covered or not. 

 

 

ASEAN members have the option of excluding products from the CEPT in three cases: 1.) Temporary exclusions; 2.) Sensitive agricultural products; 3.) General exceptions.

https://www.usasean.org/regions/asean/afta/common-effective-preferential-tariff

• What products are covered under the  Common Effective Preferential Tariff (CEPT) Scheme?
• What products are covered under the CEPT Scheme?

http://asean.org/?static_post=questions-and-answers-on-the-cept

[bluesofa]

I remember some discussion about the beer duty before, and have found this saying Thailand has already been criticised by the WTO for moving the goalposts to suit itself: