It comes at a time foreign direct investment is being delayed by confusion over pending amendments to the Foreign Business Act and the enactment of a retail business law.

The research house said the US's increased concern about intellectual piracy in Thailand would also lead to revision of its tariff privileges under the generalised system of preferences (GSP). The US sets protection of intellectual property rights as an important condition for granting privileges to trading partners under the GSP programme.

The United States is scheduled to announce its annual GSP revisions on July 1.

The Kingdom currently exports 1,200 items to the US with zero tariffs under GSP privileges. Their total export value last year was US$4.25 billion (Bt148 billion), accounting for 20 per cent of the overall value of Thai exports to the US.

Gems and jewellery made from precious metals, silver products, radial tyres, colour television sets and plastic pellets in particular enjoy high export value thanks to these tariff privileges, which strengthen Thai goods' price competitiveness, KResearch said.

However, gems and jewellery are highly likely to have their privileges cut. The US has extended the zero-tariff privilege to these items under the "Competitive Need Limit Waiver" for five years. The US's import value of these items reached $700 million last year, which exceeds the import ceiling under the waiver.

If the GSP privileges were cancelled, these products would be subject to a 5.5-per-cent import tariff. Thai gems and jewellery products have to compete with those from export rivals such as China and India, which have cheaper production costs.