Protesters make their points outside the office of the European Commission in Bangkok yesterday.

Nearly 1,000 people gathered in front of the Delegation of the European Commission and European Union members' embassies in Bangkok yesterday to protest against the EU's plan to raise import tariffs on Thai chicken.

They said the duty increase would directly hit two million people in the industry and put at risk exports valued at Bt40 billion per annum in the poultry sector and related businesses.

The EU's announcement was made under World Trade Organisation regulations for the protection of domestic manufacturers from being flooded with cheap imports.

Imported poultry products outside the EU's quota rate will be subject to a tariff of ¤102 (Bt4,935) per 100 kilograms. The current tariff levels for in-quota exports on poultry products to the EU are 10.9 per cent on cooked products, 15.4 per cent on salted products, and 8.5 per cent on turkey.

The European Commission delegation said talks would be held next month with exporters to determine the quotas.

The Thai Broiler Processing Exporters Association and 11 other concerned associations submitted a letter to the EU asking it to halt its plan to increase tariffs on cooked chicken products. The letter was sent to the EU delegation office, the Netherlands Embassy, the British Embassy and the French Embassy in Bangkok. The protesters then moved to the Government House in the afternoon.

Top management of the country's biggest chicken exporters - Charoen Pokphand Group, Saha Farm, Betagro and GFPT - also participated in the protest.

Chicken breeders and workers from Lop Buri, Phetchabun, Samut Prakan and Nakhon Ratchasima, where the processing complexes of these exporters are located, also joined the protest.

They shared the same views, saying that they want the EU to review and withdraw the tariff hike on cooked chicken products, since it would destroy the livelihood of Thai farmers and moreover violated the notion of free trade.

However, Thai and EU officials will start negotiation at the WTO in Geneva early next month to bring down the proposed tax rate. In addition, the two sides will consider compensation to Thailand resulting from any market losses after the implementation of the tariff hike.

Anan Sirimongkolkasem, president of the Thai Broiler Processing Exporters Association, said the new tariff charge would hit Thai cooked chicken the hardest as the EU is the Kingdom's second-biggest export market, after Japan.

Thai chicken exports to the EU account for 40 per cent of overall exports, while Japan takes more than 50 per cent of the country's chicken sales overseas. Thailand's export volume to the EU reached 113,195 tonnes worth Bt13.01 billion last year.

During the first seven months this year, export to the EU grew 23.75 per cent to 67,555 tonnes worth Bt7.76 billion.

Thailand's total chicken exports are targeted to reach 300,000 tonnes valued at Bt30 billion this year.

"We were surprised at the EU's announcement to raise the [outside quota] import duty by 100 per cent. If implemented, Thailand's chicken industry will face zero growth and this will create a domino effect on related industries," Anan said.

He said the proposed high levy would affect not only exporters but also related interests such as farmers, workers, feed mills, pharmaceutical manufacturers, logistical support and also packers. These related industries employ a combined of two million workers and generate an average of Bt40 billion in foreign-exchange earnings per year.

Thailand will lose export competitiveness to Brazil, which now is the biggest exporter to the EU, although its products will be subject to the same tariff rate. Since the bird-flu outbreak in Asia, Thailand can export only cooked chicken products to the EU while Brazil can export a wider variety of goods, including fresh chicken meat.

"Thailand's negotiators should focus not only on bringing down the tariffs but also getting fair compensation for our export losses," Anan pointed.

The new proposed tax will also delay the industry's five-year export plan to achieve 500,000 tonnes in production volume by 2010.

Jean Jacques Bouflet, the EU's trade counsellor in Bangkok, said the final tariff rate and compensation had not been verified and were subject to negotiation early next month in Geneva.

"All WTO chicken suppliers are being subjected to the new tariff and quota system. The compensation will depend on negotiation and trade prospects. The measure is designed to protect us [manufacturers], including Thailand, against import surges and we need to keep a check on future exports," said Bouflet.

"Our aim is to streamline the system of EU tariff levels for these products. The change will not affect Thailand's traditional export volume," he added.

Achara Pongvutitham

The Nation