THE spectre of trade protectionism has failed to dent optimism for sustained strength in exports in the year’s second half, say business leaders, even though some concede that certain types of products could be caught into the fallout of an escalating conflict.
In keeping with this balanced view, the business figures say they are bullish on the Thai economy despite the unfolding moves in the trade conflict. They believe that trade tensions between the US, China, Europe, Canada, Mexico and India will have a only a limited impact on Thai exports.
Preedee Daochai, chairman of the Joint Standing Committee on Commerce, Industry and Banking, said yesterday the committee had revised up its projection for export growth this year to 7-10 per cent, from a previous estimate of 5-8 per cent. The threat of a trade war involving some of the world’s major economies is expected to have only a small impact on Thai exports while the global economy continues to expand, he said.
The panel also revised up its forecast for the Kingdom’s economic growth for this year to a range of 4.3-4.8 per cent, from 4-4.5 per cent previously.
Ghayapad Tantipipatpong, chairman of the Thai National Shippers’ Council, said exports of washing machines to the United States have declined, falling to U$83 million in the first five months of this year, from $136 million in the same period last year. Exports of solar cell plunged to $65 million, down from $151 million.
“A more obvious impact of the trade tension is expected to be evident in the fourth quarter of this year,” Ghayapad said. Still, the council is maintaining its forecast for 8 per cent growth this year in exports, she said.
The products that are seen as most vulnerable to the impact of a trade war are in the production chains of machinery, vehicles and parts, and electrical products, she said. There are alternative markets for electrical products, such as Spain, Ukraine and Brazil. For vehicles and parts, substitute markets are Hong Kong, Russia and Middle East, Ghayapad said.
Farm products such as cassava root, fruit, coconuts, beans, vegetables and meat are expected to see gains, as Thailand may be able to export more of them, she said.
She urged the government to accelerate free- trade negotiations with trading partners such as Pakistan, Bangladesh, the EU and Turkey and for the country to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said that sales of a few export items would be hurt by the trade tensions. Electronics products, washing machines, and steel products are in this list, he said. Producers of these products may consider delaying investments, he said in response to a question how the trade tensions could affect business investment plan.
Another fear is that Chinese manufacturers may use Thailand for the import and re-export of products hit by high US tariff rates, he said. Such actions would lead to the US tariffs on Thai products.
Kalin Sarasin, chairman of the Thai Chamber of Commerce, is among the optimists and says there may be positive impacts on investment in Thailand.