The department said manufacturers and exporters of polyethylene plastic, radial tyres, colour television sets and jewellery made from metal would be hardest hit.

The US will announce its Generalised System of Preferences (GSP) revision to all trading partners next month. Thai exporters whose products enjoy tariff privileges under the GSP should look for new export markets.

Foreign Trade Department director-general Apiradi Tantraporn said certain Thai exporters would lose tariff privileges, because their export values to the US had exceeded the ceiling of US$125 million (Bt4.33 billion) a year. Jewellery made from metal will lose its privilege, due to high competitiveness. The US has extended tariff privileges in this sector for more than five years.

"These factors have made Thailand a top-priority country among US trading partners needing to be weaned off of the GSP," Apiradi said. "Washington is likely to decrease its tariff privileges for developing countries in the future, because it will focus more on bilateral trade pacts."

The GSP is an important political tool for the US government, she said.

The US will announce its yearly review of the GSP for all developing nations, including Thailand, on July 1.

"Sooner or later, Thai exporters to the US will lose the tax privileges they have enjoyed for a long time. But the loss should not hurt Thai exporters if they learn to adapt to rising competition," said Apiradi.

She added that under the normal tariff rate to the US, Thai exporters would still remain competitive, because that tariff was not that high.

For instance, the normal tariff for jewellery made from gold is 5.5 per cent, for radial tyres 4 per cent and for colour television sets 3.9 per cent.

Thai exporters must now learn to live without the trade benefits enjoyed under the preferential tariff system. They must concentrate on potential markets rather than traditional markets, including the US, because of high competition and complicated barriers, she said.

Potential markets for Thai exporters are the Middle East, Africa, Russia and Eastern Europe.

The US grants tax privileges to developing countries to strengthen their export competitiveness in the US market and as a temporary bridge to ease them into the global trading system.

Thailand is among 136 developing nations enjoying low tariffs under the GSP.

The department's report said the Kingdom's exports under the GSP programme grew 18.93 per cent to $4.25 billion last year. Thailand's total export value to the US reached $22.34 billion. The US is Thailand's biggest export market, followed by Japan.

Thailand ranks third after Angola and India for special GSP privileges.

Petchanet  Pratruangkrai

The Nation