Bangkok Bank Concerned For Future Of Trade With European Union

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THAI-EURO

BBL concerned for future of trade with EU

Sucheera Pinijparakarn

The Nation

BANGKOK: -- Bangkok Bank is urging the government to put the negotiations for a Thai-European Union free trade agreement on the fast track in case the EU ends its tax cuts for imports from Thailand.

The EU's generalised system |of preferences (GSP) means more to the private sector than the Trans-Pacific Partnership with the US, Chansak Fuangfu, senior executive vice president, said last week.

If the EU fails to extend the privileges when the GSP expires in two years, fresh frozen products - shrimp in particular - garments and textiles, and pharmaceuticals will be hurt.

Bangkok Bank, whose loan portfolio is 90-per-cent corporate credits, envisions customers in some industries suffering from higher effective prices and losing their share of the European market.

The Thai Bankers' Association would express its serious concern through the Joint Standing Committee on Commerce, Industry and Banking, which meets regularly with top government officials.

Developed countries use the GSP to grant preferential treatment to eligible products imported from developing countries |so that the products would be competitive in their domestic markets.

The World Bank in 2011 ranked Thailand as an upper middle-income country - a status that suggests it is abusing some incentives from developed economies.

Bangkok Bank has suggested to its customers to improve their production processes to comply with European standards. They are offered credit lines to finance the upgrades.

Garment and textile customers have been recommended to move their production bases to Indonesia or Vietnam to avail of the lower costs.

"The World Trade Organisa-tion cannot find solutions to |assist all countries. Each country must help itself through bilateral agreements. If Thailand cannot maintain GSP privileges, we |have to look forward to the FTA with the European Union," he said.

Banluesak Pussarangsi, executive vice president of CIMB Thai Bank, said the chances that Thailand would continue to enjoy GSP breaks with the European Union are remote because it is no longer an underdeveloped country like in the past.

Thailand has become a medium developing country, so the government should hold talks with the EU on the free trade agreement to facilitate Thai exports.

Bargaining with the EU is easier than with the US because the EU has no negative risk requirement as the US does. Some industries that used to enjoy GSP promotions might migrate their operations to Vietnam, as that emerging country will continue to be covered by the EU's GSP, he added.

-- The Nation 2012-11-19

[asiawatcher]

If the EU survives the failure of the impending collapse of the Euro, then the Bangkok Bank will have no problem but all facts point to the opposite. From other reports, there are two issues, "one in which the Eurozone countries continue using a shared currency that has "failed" in the sense it is barely functional but from which there is no feasible escape; and another where the Euro itself experiences a disorderly collapse due to either political forces or an economic shock that cannot be effectively managed by member states." In either case BBL will have it's work cut out and Thailand should remain well clear of hoarding Euro currencies. Either way it will also be a disaster for the US trade.

[jerrysteve]

Asiawatcher: You are correct, the collapse of economies withing the Union has and is already taken place; as well as unsuccessful bailouts for stability. Its already out of control. Edited November 19, 2012 by jerrysteve

[Mosha]

The Euro was badly conceived at the outset. Even one of the guys behind it admitted that earlier this year.

[Thai at Heart]

The Euro is going to disappear, unless they allow the now completely bankrupt countries to get out of it. There is no way it will survive in its current form.

As someone mentioned earlier, it was badly constructed a the beginning, something that a rather well known British economist pointed out during my time in University many years ago. This whole mess was predicted 20 years ago. The biggest irony though, is that the countries that missed the public debt targets first were Germany and France. So once that happened, everybody else had a free reign to borrow to their hearts content.

[Tatsujin]

Bangkok Bank has suggested to its customers to improve their production processes to comply with European standards. They are offered credit lines to finance the upgrades.

Why would they bother?

Garment and textile customers have been recommended to move their production bases to Indonesia or Vietnam to avail of the lower costs.

So Thailand is not cheap any longer (big surprise) and they are suggesting to export the work to other countries? Is this because of that minimum wage hike? lol

[Thai at Heart]

Bangkok Bank has suggested to its customers to improve their production processes to comply with European standards. They are offered credit lines to finance the upgrades.

Why would they bother?

Garment and textile customers have been recommended to move their production bases to Indonesia or Vietnam to avail of the lower costs.

So Thailand is not cheap any longer (big surprise) and they are suggesting to export the work to other countries? Is this because of that minimum wage hike? lol

Recommended by whom?

[Tatsujin]

Bangkok Bank has suggested to its customers to improve their production processes to comply with European standards. They are offered credit lines to finance the upgrades.

Why would they bother?

Garment and textile customers have been recommended to move their production bases to Indonesia or Vietnam to avail of the lower costs.

So Thailand is not cheap any longer (big surprise) and they are suggesting to export the work to other countries? Is this because of that minimum wage hike? lol

Recommended by whom?

I don't know, I quoted that from the article. I'm assuming Bangkok Bank are recommending it from the way I read things.

[Thai at Heart]

Bangkok Bank has suggested to its customers to improve their production processes to comply with European standards. They are offered credit lines to finance the upgrades.

Why would they bother?

Garment and textile customers have been recommended to move their production bases to Indonesia or Vietnam to avail of the lower costs.

So Thailand is not cheap any longer (big surprise) and they are suggesting to export the work to other countries? Is this because of that minimum wage hike? lol

Recommended by whom?

I don't know, I quoted that from the article. I'm assuming Bangkok Bank are recommending it from the way I read things.

Exactly. patriotic bunch huh. But of course, the Thai banks must be protected because they know how to care for Thai business and people better than foreign banks, but apparently they recommend companies to offshore their work.

And that sums up big Thai business to a tee.

Edited November 19, 2012 by Thai at Heart

[Soi Sauce]

There are some European manufacturers here already thinking about relocating to Spain and Portugal.

Wages and costs are not much more, and the workforce is better educated and better skilled. It also is a lot more productive. Thai or German built Benz, anyone?

As S E Asian wages increase, the homelands where cos moved from will again become attractive. Take the manufacturing base away from S E Asia and it ain't got a lot. China gets included here.

Back to the 3rd World is becoming a real possibility. That is where Obama really wants this part of the World, hence the visit, and No. 3will be back soon.

[Foggy Bottom]

"The World Trade Organisa-tion cannot find solutions to |assist all countries. Each country must help itself through bilateral agreements. If Thailand cannot maintain GSP privileges, we |have to look forward to the FTA with the European Union," he said.

What this guy is forgetting is that FTA's are 2-way streets - the EU members will be demanding that Thailand drop it's punitive import tariffs on products it imports from the EU. That includes all those hi-so luxury items that the elitist bureaucrats and MPs have tariffed to hell and back in order to keep them out of the hands of the masses ... products that in EU countries would be regarded as everyday items.

[bangon04]

"Bangkok Bank has suggested to its customers to improve their production processes to comply with European standards. They are offered credit lines to finance the upgrades"

and maybe they can also call for international standards in Thailand's banking system, and allowing foreign competition for Thai banks???? and they can finance their own upgrades...

[DickFarang]

Thailand should reduce import taxes on European products, including cars and wines.

European Commissioner Mr. Karel De Gucht is not an easy guy.