Major Trt Policy Faliure

[womble]

US reviews Thailand over duty-free benefits

The United States said Tuesday it was reviewing whether to renew duty-free benefits to Thailand whose economy has grown rapidly since the trade favor program was launched 30 years ago.

Thailand is among 13 countries facing the review of duty-free benefits known as the Generalized System of Preferences (GSP), which is up for renewal ahead of its expiration in December 2006.

The 13 countries, which include India, Russia and South Africa, were under review as they were classified as "an upper-middle-income economy" by the World Bank in 2005.

"The US TR (Trade Representative) is looking to decide whether to limit or change or completely withdraw GSP privileges or do nothing at all," Peter Thorin, an economic officer at the US Embassy in Bangkok, told reporters.

The United States launched the program in 1976 to help developing economies by imposing no tariffs on their imports to the United States, the world's biggest economy.

The duty-free benefits cover some 18 per cent of Thailand's exports to the United States, which rose 10 per cent year-on-year to 17.1 billion dollars in 2005.

Thai export goods under the GSP program are mainly light products such as jewelry, wooden frames for paintings and bags for packing goods, the US embassy said.

If Thailand loses duty-free privileges, the United States can impose tariffs ranging from two to 14 per cent on these items, it said.

The United States ended the GSP benefits to Hong Kong, Singapore, South Korea and Taiwan in 1989 and Malaysia in 1997.

Thailand and the United States were also pushing for a free trade agreement but talks have stalled due to the months-long political crisis here over the leadership of Prime Minister Thaksin Shinawatra.

The head of the US delegation for trade talks with Thailand, Barbara Weisel, warned in June that the lengthy political vacuum in the kingdom was jeopardising the free-trade negotiation process.

Agence France-Presse

[womble]

I seem to remember the Free Trade Agreement with the US was one of the biggest pledges of the TRT in Feb 2005 General Election, along with the mega projects.

Mega Projects are for the most part on hold or scaled back.

Now the FTA is off and not only that but duty free with US may also be cut and tarriffs imposed which will leave Thailand in a worse position trade wise than before, complete opposite of what was promised during election speaches.

Edited August 8, 2006 by womble

[samran]

Uncle Somchai and Aunty Wanpen in Bannork, Issan aren't going to care about election promises.

It'll be all about how much pork barreling and loan forgiveness the punters are offered.

[steveromagnino]

I seem to remember the Free Trade Agreement with the US was one of the biggest pledges of the TRT in Feb 2005 General Election, along with the mega projects.

Mega Projects are for the most part on hold or scaled back.

Now the FTA is off and not only that but duty free with US may also be cut and tarriffs imposed which will leave Thailand in a worse position trade wise than before, complete opposite of what was promised during election speaches.

The reason for being removed from GSP is due to being richer than before, and thus no longer needing the benefits. TRT could easily turn that into an advantage, we don't need no stinkin' benefits, and the rural population (TRT's base) would probably lap it up. Mind you last time round, the last time this was reviewed, they were boasting locally how we were doing so well and eliminating poverty etc etc, then going to the Yanks and saying, we are so poor, let us keep getting treated like a poor country missa.

The fall out of any additional duties would kick in next year, by which time election will be long decided.

In fact, I'd say an FTA with America, given how TRT is on the public side of things nationalist (and privately would love to be on its knees giving Bush a hummer) would be a potential vote loser, not a winner. Bear in mind the rural love their 30b healthcare and the idea that Thailand can stand on its own. Guys like Sanoh would tear them to shreds for selling out, and you'd have to bet that Thailand would struggle to get any sort of decent deal from USA anyway. In fact, word in the farms is that FTAs like the one done with China or Aussie are bad not good, which is why the govt now calls them economic partnership agreements - EPA.

There is a chance the GSP thing will fall in Thailand's favour again (this isn't the first time it has come up). Besides which it is only USA - Japan is a far more relevant deal in many ways that is also off the table.

As it stands now, Thai shrimp is getting hit with the WTO breaching anti dumping penalty rates, and yet seems to have no problem continuing to ship there.

Mega projects is a bigger deal breaker for votes; and that's why you see promises being made and the airport being pushed so hard. Voters in educated countries don't understand free trade, you would be asking a lot to explain how FTAs work to rice farmers in Buriram with virtually no education. but they get 'ah, Thailand got a new airport, I saw it on TV, Square face is awesome.'

[h90]

Uncle Somchai and Aunty Wanpen in Bannork, Issan aren't going to care about election promises.

It'll be all about how much pork barreling and loan forgiveness the punters are offered.

If they get promised a baby cow, some rubber trees (to get as rich as the evil southies) the world is perfect.

In future after the election if TRT get voted we also promise that christmas will be twice a year. And later, you can already start to dream maybe maybe St. Claus Taksin brings you pick up for free.

And if not, than it is because of the evil downtown people who want to oust Thaksin....