Thailand has slipped from a position as the world's ninth-biggest clothing exporter to 11th this year, Trade Negotiations Department director-general Chutima Bunyapraphasara said yesterday.

The United States is the most lucrative market for garment-exporting countries. From 2001-05, its import volume increased an average of 5 per cent each year. Major exporters to the US included China, India, Indonesia, Vietnam and Cambodia.

However, US garment imports from Thailand dropped 3.5 per cent to US$1.24 billion (Bt44.51 billion) during the first eight months this year, which was the major reason for Thailand's drop in the export rankings.

In the same period, US garment imports from Cambodia surged 27.9 per cent to $1.35 billion, and Vietnam jumped 26.1 per cent to $2.14 billion. They now rank as the fifth- and seventh-biggest clothing exporters, respectively. Chutima noted that Thailand's increasing production costs - from wages, oil prices, the baht's strength and a shortage of labour - had reduced the country's export competitiveness.

Some garment manufacturers have moved their production bases from Thailand to neighbouring countries.

"Those two key rivals [Vietnam and Cambodia] have drawn up long-term export and manufacturing strategies to encourage their garment industries. Particularly, attractive investment privileges together with low labour costs and other expenses will draw more foreign investors," she said.

Chutima said Vietnam's accession to World Trade Organisation membership allowed it to export without quota restrictions. Moreover, Cambodia has been granted the generalised system of preferences status from the US, and its low labour costs have attracted more investors - some from Thailand - to manufacture in the country.

To strengthen Thailand's competitiveness, Thailand should develop a better supply chain with customers and upgrade manufacturing and design.