Commerce Ministry, agencies bid to beat export/import obstacles

Economy October 30, 2014 01:00

By THE NATION

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THE COMMERCE MINISTRY, other public agencies and the business community are beginning to work out ways to overcome trade impediments faced by exporters and importers.



Their meeting marks a milestone in the ministry’s project implemented with the support of the International Trade Centre, which aims to identify non-tariff barriers taking the edge off the competitiveness of Thai companies in the international market. 
Their discussions were based on the results of a survey of more than 1,000 companies carried out as part of the project, which found compliance with technical regulations to be one of the main problems faced by local companies.
Overall, 38 per cent of Thai exporters are handicapped by burdensome regulations, which is one of the lowest rates among countries surveyed by the centre since 2009. 
However, important differences were seen across industries. More agro-food exporters face difficulties with non-tariff measures (NTMs) than manufacturing exporters. Countries often regulate agro-food products more vigilantly for reasons of consumer and environmental protection. 
The direction of trade also matters. The share of importers troubled by burdensome NTMs is much lower at 25 per cent. 
Across partner countries, regional differences are evident. The EU appears to be a particularly difficult market to access for Thai exporters. Nearly a quarter of the reported problems relate to EU regulations, while the EU consumes only 11 per cent of Thai exports. 
In Asean, despite economic integration, many trade impediments – 21 per cent of reported cases – concern the region’s trading partners, particularly Malaysia and Indonesia.
 
Technical requirements
Among the regulatory obstacles faced by exporters, 45 per cent of the reported cases relate to technical requirements, such as specifications that exported products need to comply with – including sanitary and phytosanitary measures – and “conformity assessment” procedures such as certification, which provide proof of compliance with the underlying technical requirements. 
Most of these cases include the high standards required by the EU and the cost of certification. The strict fumigation requirement in Australia is also a widely reported problem by exporters.
Exporters of manufactured products described encountering problems in Asean countries with the recognition of product quality tests and certifications issued in Thailand. Companies incur higher cost and delays linked to sending product samples abroad for testing and inspection or having foreign inspections travel to Thailand.
While exporters do not run into much difficulties with Thai regulations, they have experienced some procedural hindrances like delays, administrative hurdles and high fees, which make complying with a given regulation difficult. 
Obtaining the certificate of origin, in particular, is reportedly difficult for exporters due to a large documentation requirement and inconsistencies in product classification.
The results of the NTM survey in Thailand highlight the potential for further improvements in the domestic trade environment, particularly at the procedural level, as important trade impediments persist. 
The relatively low incidence of burdensome NTMs and the types of problems reported, however, also demonstrate that Thailand has already exerted considerable efforts to facilitate trade. 
The survey results will contribute to optimising policies and processes, in particular with a view to support the deeper integration within Asean.