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Chinese textiles to flood Thailand

By PETCHANET PRATRUANGKRAI

THE NATION

Published on November 12, 2009

Cheap fabrics, textiles and clothing from China would flood into the country and crush the local industry, particularly the Thai silk industry, after borders are opened to seamless trade next year, experts warned yesterday.

"Thai silk farmers, who produce traditional handmade silk, could be forced out from the industry and producers and traders may shift to importing more Chinese silk at lower prices," said Buntoon Wongseelashote, president of the Thai Silk Association.

Both the Asean-China Free Trade Agreement and Asean Free Trade Agreement go into effect next year.

Panellists at a seminar in Bangkok entitled "Gurus talk on textile and garment industry's trend in the next five years" called for operators to adjust their production to serve market demand, focus more on design and stress green production and environmental safety.

Buntoon said traditional Thai silk farmers would be the hardest hit. Only the silk industry would benefit, as it could enjoy lower costs of raw materials.

The 10-per-cent duty on silk from China would be eliminated immediately, not gradually.

Silk farmers have faced difficulties competing with Chinese silk, as labour costs are higher. If the import tax was cut to zero, more traditional Thai silk farmers would disappear.

Traditional Thai silk farmers have decreased from more than 500,000 households in the past decade to 100,000 now, he said.

The Customs Department reported imports of woven silk worth Bt103.78 million in the first nine months of this year. During the period, Chinese woven silk rose 7.91 per cent to Bt34.32 million, or 33 per cent of total imports.

Buntoon also slapped the Agriculture Ministry's policy to promote only machine-made silk rather than showing concern for traditional Thai silk farmers.

The government should use strict measures to control the influx of silk from other countries to protect domestic producers, he said.

Suchai Pornsirikul, chairman of the Textile Merchants Association, warned that Chinese producers would dump their textiles and fabrics to increase their market share.

"The Asean-China FTA will pave the way for Chinese exporters to cut their retail prices in Thailand, as the country is one of the centres for supplying textiles to other countries," he said.

Local textile producers and traders must focus on higher quality goods rather than fight against low priced goods from China, he said.

Jittikhun Chiempittayanuwat, president of the Thai Synthetic Fibre Manufacturers' Association, said the textile and garment industry would run into rising non-tariff barriers under trade liberalisation.

Although the FTAs would open up opportunities for Thai exporters, it would also be a challenge for producers who cannot adjust to rising demands from importers, he said.

Virat Tandechanurat, director of the Thailand Textile Institute, said the textile and garment industry would face more pressure from importers, as they would issue specific requirements such as green production, design and technology to serve the wide-ranging demands of consumers in the near future.

Sukij Kongpiyacharn, vice president of the Thai Garment Manufacturers Association, said the FTAs would not only create challenges for enterprises, but also opportunity for producers to invest in partner countries.

As Thailand lacks sufficient manpower, Thai investors should consider neighbouring countries with lower costs and a plentiful supply of workers in order to ensure the industry's growth in the future, he said.

-- The Nation 2009/11/12

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