One-Third of Thai Goods Eligible for GSP Will No Longer Qualify in Six Months
The Office of the U.S. Trade Representative, as part of a broader announcement on changes to the Generalized System of Preferences, announced late Oct. 25 that about a third of Thailand's GSP-covered trade will exit the preferences program April 25, 2020, because it does not allow its workers to participate in collective bargaining and other labor rights, despite six years of engagement. The USTR said all seafood products are being removed from the program because of abuses of workers in that industry and in shipping; other products were chosen because Thai imports are a small share of the U.S. imports, but the U.S. is relatively important for Thai exporters. In all, GSP imports from Thailand were $4.4 billion last year, USTR said; after India's exclusion from the program earlier this year, Thailand accounted for the highest volume of exports qualifying for GSP. Even with the reduction, it will still be the largest beneficiary. The Associated Press reported Oct. 28 that Thai officials will seek to talk about averting the eligibility changes.
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There are 573 tariff lines of Thai exports leaving the GSP program next year, including 55 categories of fish and shellfish; gold necklaces; spark plugs; motors, alternators and generators; fuel pumps for gasoline engines; fuel injection pump parts; herbal tea and more than 60 other tariff codes covering foods and beverages.
However, the Bangkok Post said that Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy, estimated Oct. 28 that the increased average tariff of 4.5 percent on these products would lead to a decline in sales of only about $30 million next year, which is about one-tenth of one percent of total Thai exports.
Set to take effect on April 25 next year, the suspensions cover a total of 573 types of goods which Ms Pimchanok said will face a higher import tariff of 4.5% leading to exports to the US dropping to an estimated $28.8-32.8 million next year, or 0.01% of overall Thai exports.
The USTR said it will restore about one-third of import volume -- almost 150 tariff lines -- of what it had removed in Ukraine's eligibility over intellectual property concerns. Originally, Ukraine exported $36 million worth of goods under GSP; about $12 million historic value in exports will be eligible Oct. 30. The USTR said the partial restoration is in recognition of legislation passed in Ukraine to protect intellectual property, but that it is not fully restoring the country's eligibility because of continued concerns. The Washington Post had reported last week that the USTR was ready to restore eligibility to Ukraine months ago, but was told that the White House opposed such a move.
Reviews of Bolivia, Uzbekistan and Iraq ended without any restrictions on those countries' eligibility. The USTR self-initiated a review of Azerbaijan over workers' rights, and has accepted a petition from the International Intellectual Property Alliance over South Africa's protection of IP.