Auto, shoe sectors hope to maintain export levels

At a seminar yesterday entitled "Opportunities for Thai Exporters to Reap Benefits from the EU's GSP", conducted by the Foreign Trade Department, Thai exporters said they expected to take a hit from the global economic slowdown.

But there are still some positive factors. EU tariff privileges being extended to more than 7,000 Thai goods until the end of 2011 will help increase exports of some products to that grouping's markets.

Phaibool Poocharoen, chairman of the Automotive Industry Club of the Federation of Thai Industries (FTI), said the value of his sector's exports were expected to drop 20 per cent next year from Bt500 billion to Bt550 billion this year, due to the world economic meltdown.

"It'll be a tough year for vehicle exports, because most export markets will have a lower capacity for imports. Export growth to the Middle East will also slow next year, due to falling oil prices," he said.

Phaibool remains optimistic about exports to the EU, because it has agreed to lower the tariff on Thai pickups with 2,500cc engines to 6.5 per cent, from 10 per cent now, starting on January 1. It will also lower the tariff on Thai pickups with engines of less than 2,500cc to 15.4 per cent, from 22 per cent now.

However, exports to the EU may not increase as much as expected, because of slowing economic growth in its markets. To compensate for losses from lower export growth, Phaibool said the auto sector would focus on new EU member states.

Meanwhile, Thamrong Tritiprasert, chairman of the FTI's Footwear Industry Club, said Thai shoe exports would drop 5 per cent next year, from a value Bt32 billion of this year.

Exports to the US, which now accounts for 23 per cent of the sector's export value, will drop sharply. But exports to the EU, which presently accounts for 33 per cent of the sector's export value, should maintain the same figure as this year, thanks to tariffs on Thai shoes being cut from 8-9 per cent to 3-5 per cent.

Moreover, major export competitors like China and Vietnam face higher tariffs and anti-dumping duties, from 18-24.5 per cent.

Foreign Trade Department deputy director-general Unchana Withayathamthat urged Thai exporters to take advantage of the EU's GSP privileges, in order to compensate for losses from lower exports to EU markets.

However, she warned exporters to be careful about rules of origin, because the EU has strict requirements about major raw materials of goods exported to the grouping under its GSP being from Thailand. Otherwise, Thai exporters may have to pay a normal tariff rate.