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VIET SEAFOOD

Thai Processors Told To Gear Up For FTA With EU European Union, September 11, 13

European Union and Thai officials, as well as private enterprises, have high expectations that a free-trade agreement (FTA) between the two sides will help offset the loss of tariff privileges for trading with the EU, and even gain more opportunities for Thai industries.

The FTA will last longer time than GSP, deeper cut, and more tariffs eliminate on many goods, but would remain an eligible country after forming an FTA with the union.

However, they warned Thai manufacturers to improve their product standards urgently so that they will be able to compete in the EU market.

At a seminar held by the Foreign Trade Department titled “Strengthen Export Competitiveness beyond Generalised System of Preferences”, Bangjongjit Angsusingh, deputy director-general of the department, said exporters needed to prepare quickly for the loss of GSP tariff privileges next year.

“Thailand is expected to lose GSP fully. Thai enterprises should develop their quality and standards to serve the market.” She added that the FTA, which is expected to be concluded in the next few years, should help compensate for the loss of GSP privileges.

From next January, many products exported from Thailand to the EU will lose their tariff privileges as the GSP system is reformed. Those products include meat, fish, precious stones, pearls, tuna, shrimp, and rubber products. Thailand is expected to exit fully from the EU GSP scheme in 2015 as a graduate country with upper incomes.

For instance, in 2014, the tariff for frozen shrimp will increase from 4.2 percent currently to 7.12 percent, for tuna from 18.5 percent to 22 percent, and women's cotton overcoats from 9.6 percent to 12 percent.

Ambassador David Lipman, head of the EU Delegation to Thailand, said this country would no longer be a beneficiary of the GSP, but would remain an eligible country after forming an FTA with the union.

“Despite losing the GSP, the FTA between Thailand and the EU should set permanent tariffs on a mutually acceptable [basis]. The FTA will last longer time than GSP, deeper cut, and more tariffs eliminate on many goods,” Lipman said.

He said the FTA would also facilitate domestic reform in Thailand, lower the price of some goods for Thai consumers, support development, and foster more foreign direct investment.

Moreover, after the ASEAN economic integration, Thai shipments of some goods should also gain regional cumulating for some products exported to the EU.

Richard Stokes, group manufacturing director of CP Foods (UK) Limited, said the loss of GSP privileges would cause difficulty for Thai exporters, as the EU market was highly competitive. However, he said the current challenge for the Thai shrimp industry was the outbreak of early mortality syndrome that had cut the supply of shrimp. His company has had to bring some shrimp in from Vietnam to keep trading in that product.

He added Thai shrimp should urgently develop their standard to ensure competitiveness after losing of GSP.
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