Thailand likely to stay on US watchlist

Thailand's PWL trade status would likely remain unchanged for the next few years despite serious efforts to stamp out sales of illegal products, said Buntoon Wongseelashote, chairman of the Thai Chamber of Commerce's subcommittee on trade issues.

 "The US tends to cut back on privileges to trading partners during economic downturns. A rising trade deficit and drop in domestic growth will prompt the US to keep Thailand on the PWL for the next few years," Buntoon said.

The US economy is projected to see worse-than-expected economic growth of minus 1.3 per cent to minus 2 per cent this year.

While the US government has extended Generalised System of Preferences (GSP) status on more than 3,400 Thai products to the end of 2009, it is unlikely to extend them in subsequent years.

A trader source said the US decision on whether to upgrade Thailand's trade status was not that important, as the country has been reducing privileges to trade partners for some time in an effort to maintain economic growth.

Thai exporters should not rely on trade privileges and learn to adapt to rising protectionism around the world to ensure smooth trade growth, the source said.

To ensure competitiveness in the face of lost tax privileges, the source said, Thailand should make sure its products meet international standards, including the tough requirements of the European Union and Japan; ensure all products include value-added, in the form of packaging, design and brand; and develop logistics management to reduce production and transportation costs.

Deputy Commerce Minister Alongkorn Pollabutr will make a last ditch attempt to convince the US trade representative (USTR) to upgrade Thailand's trade status during his visit to Washington this week.

The ministry believes an upgrade in trade status would give Thailand more export privileges under the GSP. Thai exporters would also face fewer non-tariff barriers, which are expected to increase as the recession-hit US protects its markets.

"Although it would be quite difficult for the US to upgrade our trade status to a Watch List country given its economic slowdown, the visiting [Commerce] officials should show that the Thai government has made a serious effort to crack down on IP violations and prevent Thailand from being downgraded to [PWL]," Buntoon said.

Recently, Pharmaceutical Research and Manufacturers of America (PhRMA) recommended the USTR downgrade Thailand 's trade status to Priority Foreign Country (PFC), which would subject Thai exports to the US to higher tariffs and a loss of tax privileges.

The USTR will finalise its revision of the special 301 report by the end of April.

On March 9-17, Alongkorn and officials from the Intellectual Property Department are scheduled to meet representatives of US organisations that have influence on the USTR's decisions on trade status.

 Those organisations are PhRMA, the Biotechnology Industry Organisation, the Motion Picture Association of America, the International Intellectual Property Alliance and the American Apparel and Footwear Association. The delegation will also meet with executives of Levi Strauss & Co.

Alongkorn will also meet with members of the House Ways and Means Committee, including US representatives Jim McDermott, Charles Rangel and Sander Levin, as well as US representatives Henry Waxman and Donald Manzullo and Senator Charles Grassley.

Despite continued cracking down intellectual property right violation, Thailand may remain in the Priority Watch List of the US 's trade status for the next few years due to the Washington has to protect its market amid the hard time of economic recession.

 Buntoon Wongseelashote, chairman of the sub-committee on trade issues of the Thai Chamber of Commerce, said that despite serious cracking down on illegal products, Thailand's trade status on "Priority Watch List" (PWL) would remain unchanged for the next few years.

 "The US trends to cut trade privileges given to its trading partners during its economic downturn. Rising trade deficit and domestic growth drop has prompted the US to remain Thailand in the PWL for the next few years," said Buntoon.

 It is expected the US economy is likely to worse than expected of a minus 1.3 per cent to a minus of 2 per cent this year.

 Although, the US government has extended the generalised system of preferences (GSP) for more than 3,400 Thai products to the end of 2009, it has high possibility that it will not extend the benefit for Thailand next years.

 A trader source said that it was not important whether the US will upgrade or downgrade Thailand 's trade status in the future as it has highly attempt to reduce privileges that giving to trading partners for long in order to maintain its economic growth.

 Therefore, Thai exporters should not rely on trade privileges and learn to adapt themselves to aware of rising protectionism to ensure smoothly trade growth in the future, said the source.

 Measures to adapt ourselves to ensure competitiveness despite losing tax privileges are to apply our products to meet international standards such as highly requirement of the European Union and Japan; to create value-added for all products including such as packaging, design, and brand; and develop our logistic management to reduce costs of production and transportation.

 However, Deputy Commerce Minister Alongkorn Ponlaboot will make a last ditch attempt to convince the US Trade Representative to upgrade Thailand 's trade status during his visit to Washington this week.

 The ministry is expected that if Thailand was upgraded, the country will gain more export privileges under the GSP to the US as better trade status. Thai exporters should also face less non tariff barriers after the American government has a policy to protect its market during the economic recession.

 "Although it was quite difficult for the US to upgrade our trade status to the Watch List country during its slowing down economic growth, the visiting should show that Thai government has seriously struggling to crack down IP violation and prevent Thailand from being downgrade to Priority Foreign Country," said Buntoon.

 Recently, the Pharmaceutical Research and Manufacturers of America (PhRMA) recommended the USTR to downgrade Thailand 's trade status to 'Priority Foreign Country' (PFC), which would subject Thai exports to the US to higher tariffs and loss of tax privilege.

 The USTR will final its revision of the special 301 report by the end of April.

 During March 9-17, Alongkorn and the Intellectual Property Department are scheduled to meet many organisations of the US that have influenced on the USTR's decision on trade status revision.

 Those organisations are the Pharmaceutical Research and Manufacturers of America and Biotechnology Industry Organisation, Motion Picture Association of America, International Intellectual Property Alliance, American Apparel and Footwear Association, and executive of Levi and Strauss & Co.

 Moreover, he will meet with the US House Ways and Means Committees including Jim McDermott, Charles Rangel, Sander Levin, and the US House representatives Henry Waxman and Donald Manzullo and senator Charles Grassley.