Revision of the GSP may be a blessing in disguise for Thailand. It may serve as a reality check to compel Thai exporters to upgrade their production capabilities and develop more of a competitive edge internationally at long last.

Thai industry may finally be forced to advance itself so that it no longer must rely on the exemption and the more general rules of the World Trade Organisation (WTO) granted by wealthy industrial countries to less-developed trading partners.

Unfortunately, Thai exporters still compete with emerging lower-wage countries like China, India and Vietnam in offering cheap exports. Malaysia and Singapore, meanwhile, have graduated from their respective GSP programmes to the point they now export higher-value-added products.

That said, we do hope GSP benefits will be maintained for Thai exports in the US market. At present, 18 per cent of Thai exports destined for the US fall under the GSP programme. Thai exporters should nonetheless prepare to live without the GSP, as a review is currently underway to withdraw benefits to 13 countries, including Thailand.

The Kingdom is high on the list of countries targeted for the cut because it is the second-largest beneficiary of the programme, which waives tariffs on a number of Thai exports to the US.

Leaders of the trade committee said they would not support renewal unless the programme was revised and the benefits were spread out among more countries. At present, the four top beneficiaries receive half the benefits provided by the entire programme. Pressure from Congress has prompted Washington to "limit, suspend or withdraw" GSP benefits to the 13 countries. Officials admit the prospects are not good for Thailand - a middle-income developing country - to remain a beneficiary.

This is not the first warning of a possible end to GSP benefits for Thailand.

With no drastic changes in the programme as it relates to Thailand over the years, Thai exporters have become complacent. Instead of upgrading the quality of their products and going upmarket, many remain content to compete against low-quality Chinese products that do not enjoy GSP benefits in the US market.

The fate of the GSP for Thailand will be decided by the US Congress, which must address the concerns of its constituents. A decision on the programme is unilateral and not negotiable.

The programme was meant to be temporary anyway. Countries like Taiwan, Malaysia and Singapore that benefited from it in the past were eventually excluded.

The pressure for amendments to be made to the programme has never been greater. Washington is also facing a high trade deficit, because of cheap imports from lower-cost nations. After the stalemate of the Doha Round of trade negotiations, some congressmen cited the possible revision of the GSP programme as a measure to press India and Brazil to return to the WTO's negotiating table. Among the programme's key beneficiaries, Indonesia is likely to continue to benefit, due mainly to recent catastrophes and political instability.

Bangkok, meanwhile, does not have much leverage. Its export value and GDP make the country a prime candidate to be weaned off of the GSP. The Kingdom's recent stance on Burma may also have offended some in Congress. The US once threatened to cut GSP on Thai exports citing the abuse of workers' rights.

As the revision process is not yet finalised, Thai exporters may be praying for whatever benefits they can get, but they should also start thinking about how to compete successfully in the US market without the GSP. In the unlikely event of GSP retention, it would be still be too risky a business practice to rely on low tariffs alone.