They must keep their exports within the quota restriction or face an extra import fee.

Under the EU's new regulations, the import of poultry products will be subjected to an import quota or special import tariff. Those exceeding the export volume will be charged extra.

The Commerce Ministry reported that Thai chicken exports under the quota system will be subjected to a 10- to 13-per-cent levy. However, the non-quota tariff will be increased to higher than 50 per cent. Thailand is the world's leading exporter of processed chicken, and the EU is its main market.

Jean-Jacques Bouflet, a trade counsellor in the EU office in Bangkok, said the new regulation would apply to salted chicken, cooked chicken and turkey.

The measure aims to systematise tariff collection for imported poultry products. In addition it will narrow the price gap between imported and domestic goods, he said.

"The plan has been drawn up to protect domestic producers, because imported product prices are cheaper than local goods. We want our local-made products to stay in the market," he said.

Thailand exported 170,000 tonnes of poultry in 2003, skyrocketing to 265,000 tonnes last year. The ministry also said the value of processed-chicken exports value had grown by 28

per cent to US$178.32 million (Bt6.7 billion) in the first half of this year.

Exporting countries can voice their disagreement with this measure to the WTO before the middle of September. Since the bird-flu outbreak, cooked chicken has become Thailand's key export product to the EU.

Adirek Sripratak, president and chief executive of Charoen Pokphand Foods Plc, said the measure was designed to protect EU manufacturers.

"The restriction may reduce Thai processed-chicken exports in the near future," he said.

Unfortunately, the Kingdom is also facing a fresh bird-flu outbreak. As a result the EU has extended its import ban on fresh chicken until 2007. After that, the EU will consider the bird-flu situation in Thailand before deciding whether to extend it further.

Thailand's total chicken export volume is expected to reach 300,000 tonnes this year, an increase of 11 per cent from 2005. However, the growth of the market has proved dramatically lower than the previous projection of 30 per cent.

To maintain export competitiveness, the government should rush to register its comments with the WTO to prevent other countries following suit and raising similar trade barriers, exporters said.

Petchanet Pratruangkrai

The Nation