Country Report: Enterprise survey on Non-Tariff Measures in Thailand 2008
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1 Country Report: Enterprise survey on Non-Tariff Measures in Thailand 2008 Emerging trade issues for policymakers in developing countries of Asia and the Pacific: NEW ERA OF TRADE GOVERNANCE 4-6 March 2009 Manila, Philippines
2 Outline Thailand s economic and trade overview Trade measures; Tariff policies, Non-Tariff policies SPS, TBT, AD, CVD, SG in Thailand Business Survey and Results Summary of NTM applied by Thailand Challenges (problems and lesson learned) on business survey and official data collection Conclusions
3 Thailand s economic and trade overview After the 1997 crisis, the economy has been relying much more on international trade sector (Trade to GDP ratio is about 1.3 in recent year) GDP has been growing at the rate of about 5% from with service sector accounted for 45% (mainly from tourism and tourism related industry) industry sector 44% and agriculture sector 11% Better diversified exports and imports both in products and trading partners (the top ten exports and imports consist of industrial as well as agriculture products) and also more intra-industry trade
4 Thailand s economic and trade overview (cont.) Actively involved in bilateral trade agreement both as an individual country and as a member of ASEAN leads to Multiple tariff structures An increasing significant of ROO concerns ASEAN Accumulation Rule (40% local or regional contents) ROO requirement for GSP (Shrimp exports to the US) Tariff rate quota on diary products (Thailand-Australia FTA and Thailand-New Zealand FTA) and other products in Thailand-Japan Closer Economic Partnership Agreement, for example.
5 Thailand s Selected Macroeconomic Indicators: Annual growth rates and share to GDP At Constant 2000 Prices, in Percentage Gross Nation Product (GNP) Gross Domestic Product (GDP) Agriculture (share to GDP) Industry Sector (share to GDP) Service Sector (share to GDP)
6 Trade Structure Thailand major export partners ( ) Destinations / region Export (Mil. of US dollars) 2008(f) Japan 20, , , , , , United States 20, , , , , , EU , , , , , , EU 15 21, , , , , , ASEAN 2 40, , , , , , Middle East 9, , , , , , Australia 7, , , , , China 16, , , , , , Hong Kong 10, , , , , , India 3, , South Korea 3, , , , , Source: Customs Department (Compiled by the Bank of Thailand)
7 Trade Structure (Cont.) Thailand s major import partners ( ) Destinations / region Import (Mil. of US dollars) 2008(f) Japan 33, , , , , , United States 11, , , , , , EU , , , , , , EU 15 13, , , , , , ASEAN 2 30, , , , , , Middle East 28, , , , , , Australia 5, , , , , , China 20, , , , , , Hong Kong 1, , , India 2, , , South Korea 6, , , , , , Source: Customs Department (Compiled by the Bank of Thailand)
8 Thailand Top ten export in 2006 Exports Commodity Description Value Percent share Growth of exports in value (% p.a.) Rank Total 130, Total of top ten exports 91, Boilers, machinery; nuclear reactors, etc 23, Electrical, electronic equipment 23, Vehicles other than railway, tramway 10, Rubber and articles thereof 8, Mineral fuels, oils, distillation products, etc 6, Plastics and articles thereof 6, Meat, fish and seafood food preparations nes 3, Pearls, precious stones, metals, coins, etc 3, Cereals 2, Organic chemicals 2,
9 Thailand Top ten import in 2006 Imports Commodity Description Value Percent share Growth of exports in value (% p.a.) Rank Total 128, Total of top ten imports 98, Mineral fuels, oils, distillation products, etc 25, Electrical, electronic equipment 25, Boilers, machinery; nuclear reactors, etc 18, Iron and steel 7, Plastics and articles thereof 4, Pearls, precious stones, metals, coins, etc 4, Vehicles other than railway, tramway 3, Organic chemicals 3, Articles of iron or steel 3, Copper and articles thereof 2,
10 Trade measures Tariff policies For the last two decade, Thailand s average tariff has been reduced to cope with its export-oriented trade policy. As a result, the rate of protection has been declined in general Despite tariff rate reduction, a number of peak rate tariff is still applied in a wide range of product; automobile, dairy products (milk powder), etc. to provide protection for domestic (infant) industries
11 Trade measures (Cont.) Non-Tariff policies Tariff quotas are applied in several products such as diary products Increasing numbers of SPS and TBT measures along with an increase in varieties of traded products and the number of trading partners involve as evidenced by the increasing number of dispute cases involving products imported to Thailand Subsidies are also applied in several agricultural product under price intervention schemes
12 SPS and TBT SPS As a major exporter of agriculture products, Thailand has increasing number of SPS applied and receiving more complaint cases from exporter (recorded by the department of foreign trade, MOC) accusing of SPS violation in the importing countries TBT Increasing numbers of TBT imposed on industrial products imported and also rising number of complaints (especially for trade with China) related to TBT
13 AD, CVD, SG in Thailand AD AD duties are imposed on iron steel, stainless steel, crystal grass block, and citric acid imported from several countries including China, Japan, Russia, India, Indonesia, Taiwan, Korea, Kazakhstan, Algeria, Romania, EU, Ukraine, Venezuela, Slovak, Argentina, South Africa, and Czech Republic CVD and SG Thailand implementation of countervailing measure and safeguard measure are very limited. In most cases, Thailand is on the receiving end of these measures
14 Business Survey and Results Country Thailand Name of Survey Enterprise survey on NTM in Thailand 2008 Reference period June 2008 January 2009 Types of interviewed enterprises Geographic coverage Covered sectors Excluded sectors Comments Collection technique Sampling frame Exporting and importing companies Bangkok, near by provinces, and some arbitrary selection industrial estates As many sector as possible Services Including large, medium, and small enterprises Personal interview survey (face-to-face interview) Total number of companies in target population
15 Business Survey and Results Total number of contacted companies Total number of responses (filled questionnaires) (600) 800 (340) 480 with about (311) 434 companies report at least 1 NTB case and about (29) 46 report no NTB case Response Rate (57%) 60% Executing institution Contact name Contact address Number of interviewers 7 Average number of questionnaires per interviewer Average time per interview The Center for International Economics and Development Studies Santi Chaisrisawatsuk Santi_nida@yahoo.com (49) minutes
16 Business Survey and Results Companies by Sector 13% 23% 14% 50% Manufacturing Manufacturing+Trading company Trading company Other Other including Agricultural and Agro-food which Accounted for About 3.2%
17 Business Survey and Results Extent of Foreign owership 36% 15% 1% 48% No foreign ownership Foreign owership less/equal to 50% Foreign ownership more than 50 % Not available
18 Business Survey and Results Business in operation (more/less than 5 years) 0% 8% Less than 5 years More than 5 years Not available 92%
19 Business Survey and Results Size of enterprises 1% 5% 9% 7% 0-9 employees employees employees More than 50 employees 78% Not available
20 Business Survey and Results Number of comp anies Manufacturing Trading company Agricultural and agro-food Other 48 Manufacturing + Trading company Companies by Sector Manufacturing + Agricultural and agro-food Trading company + Agricultural and agro-food Manufacturing + Other Not available 0% 1-20% 21-40% 41-60% More than 60% Not available
21 Business Survey and Results Total number of reported cases 16% 4% 6% 74% 1-4 cases 5-9 cases 10 cases more than 10 cases
22 Business Survey and Results NTM Categories of reported cases ; cases Sanitary and phytosanitary measures Technical barriers to trade Other technical measures Price control measures Quantity control measures Export related measures Other
23 Business Survey and Results Top-15 Product for which cases have been Report Number of reported Number of reported cases Number of reported countries HS Product Code
24 Top-15 products for which cases have been reported HS HS Product Description Number of reported cases Number of reported countries 1006 Rice Crustaceans Fresh or dried guavas, mangoes and mangosteen Fish fillets and other fish meat Parts and accessories of the motor vehicles of heading to Fish, frozen, excluding fish fillets and other fish meat of heading Fruit, nuts and other edible parts of plants, otherwise prepared or preserved 'Bananas, incl. plantains, fresh or dried 'Wooden furniture (excl. for offices, kitchens and bedrooms, and seats) 20 9
25 Top-15 products for which cases have been reported 'Frozen shrimps and prawns, shrimps and prawns in shell, cooked by steaming or by boiling in water 18 8 'Fresh tamarinds, cashew apples, jackfruit, lychees, sapodillo plums, passion fruit, carambola, pitahaya and other edible fruit 18 5 Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs Plastics and articles Edible fruit and nuts; peel of citrus fruit or melons Mollusks (also clam, oyster) Electrical Machinery and Equipment and parts 16 6 Other Other Total 1256
26 Business Survey and Results Top 15 countries for which cases have been reported Viet Nam, 1% Indonesia, 1% Other, 12% Hong Kong, 1% Canada, 1% Taiwan, Province of China, 2% European Union, 25% Russian Federation, 2% United Kingdom, 2% Germany, 2% Malays ia, 3% Republic of Korea, 3% Australia, 6% United States of America, 18% China, 8% Japan, 13%
27 Summary of NTM applied by Thailand Authority agencies related to NTM consist of Custom Department as practical unit National Bureau of Agricultural Commodity and Food Standard (ACFS) Ministry of Agriculture and Cooperatives Thai Industrial Standards Institute, Ministry of Industry Department of foreign trade, Ministry of Commerce Ministry of Public Health Majority of NTM in Thailand are SPS and TBT measures Anti-Dumping applied on Iron steel and stainless steel in 14 countries, more products are added recently; grass block, citric acid Tariff rate quotas are applied mostly to agricultural imports such as dairy products, maize, rice, coconut oil, soya bean, raw silk, potatoes, copra, garlic, onion, coffee, tea, etc.
28 Summary of NTM applied by Thailand Measure categories Number of Products (2-6 Digits) Percent of Number of Products (2-6 Digits) Sanitary and phytosanitary measures Technical barriers to trade Other technical measures Price control measures Quantity control measures Para-tariff measures Finance measures Anti-competitive measures Export related measures Trade related investment measures Distribution restrictions Restriction on post-sales services Subsidies Government procurement restriction Intellectual property Rules of origin Other TOTAL
29 Challenges Business survey NTM has not been taken as very serious obstacle to business especially for SME SME for the most part, relies on trading company services to take care of NTM issues which in many case very costly There are complaints of questionnaire is too long (very academic) and require the interviewee to have specific knowledge about the products and time consuming
30 Challenges Businesses are reluctant to provide significant information because they consider such NTM as secrete information and have crucial implication on their advantageous position in the market and in some cases are afraid it will create negative relationship with their trading partners by accusing for using NTB against them. Lacking knowledge about NTM, companies have limited understanding on what non-tariff measures are and what its impacts are on businesses. Generally, companies will recognize the NTM problems when they actually face with the difficulty caused by the problems.
31 Challenges Only small proportion of companies realize the significant of NTM Origin Equipment Manufacturing (OEM) producers are less concern about NTM Larger firms face more varieties of NTM due to products and customers (destination countries) Some of the NTB are simply caused by lacking of trade facilitation, i.e. lacking (no enough) inspection equipments used in order to handle increasing numbers of shipments particularly for perishable products. More rigorous private product requirements than NTM related to the products particularly for SPS and TBT (most cases are discovered in agricultural products on food safety concerns) which lead to confusion in the private sector.
32 Challenges Official data collection Several government agencies responsible for different NTM related issues and has not been well organized so that they are not working in harmonization manners Need to keep updating the data in order to make the database accurate and useful, this seems to be the most important part for data management system in Thailand
33 Conclusions Several agencies domestically and internationally need to involve in collecting NTM data set (especially for developing countries and least developed countries) Need to build up awareness and recognizing the significant of NTM in the private sector especially for SME Capacity building in terms of providing understand on NTM for business is important for the accuracy of the data collected and the cooperation in the data collection process
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