Thursday, April 2, 2009

While Abhisit Travels the World Singing the Praises of Free Trade, Thailand Remains Protectionist

The Nation

The US National Trade Estimate yesterday accused Thailand of non-transparent practices, having both tariff and non-tariff barriers, and maintained the Kingdom in its Priority Watch List for low intellectual property protection.

The report said US goods trade deficit with Thailand was US$14.5 billion (Bt516 billion) in 2008, an increase of $181 million from $14.3 billion in 2007.

US goods exports in 2008 were $9.1 billion, up 7.2 per cent from the previous year. Corresponding US imports from Thailand were $23.5 billion, up 3.5 per cent. Thailand is currently the 29th largest export market for US goods.

US exports of private commercial services (excluding military and government) to Thailand were $1.8 billion in 2007, and US imports were $1.8 billion.

Sales of services in Thailand by majority US-owned affiliates were $3.2 billion in 2006, while sales of services in the US by majority Thai-owned firms were $295 million.

US foreign direct investment in Thailand was $15 billion in 2007, up from $10.9 billion in 2006. US FDI in Thailand is concentrated largely in the manufacturing, banking, finance/insurance, and wholesale trade sectors.


The report said Thailand's high tariffs remain an impediment to market access in many sectors. Its average applied most favoured nation (MFN) tariff rate is 11.2 per cent with some tariffs as high as 80 per cent. The highest tariff rates apply to imports competing with locally produced goods, including agricultural products, automobiles and automotive parts, motorcycles, alcoholic beverages, fabrics, paper and paperboard products, and restaurant equipment.

Duties on imported consumer-ready food products typically range between 30 per cent and 50 per cent, the highest among Asean members, with some as high as 90 per cent.

The report said Thailand also applies a 10-per-cent tariff on all pharmaceuticals (excluding vaccines and therapies for HIV, malaria, and thalassemia). In addition to this tariff, all medicines are subject to a 7-per-cent valued-added tax.

Thailand's tariff rates for textile imports are high, the report said, ranging from 20 per cent to 30 per cent for most fabrics and 30 per cent for most clothing and other made-up textile products.

In addition, the complex and non-transparent nature of Thailand's tax administration system, the import duties, excise taxes, and other surcharges lead to a cumulative tax burden on most imported spirits of about 400 per cent.

Read the full report here.

I got to give credit to The Nation. Usually they either don't report these statistics or pretend Thailand is a victim to US trade imperialism.

By the way, I have no problem with protectionist policies. But Abhisit shouldn't be running around the world lecturing countries about free trade when Thailand isn't a free trade country and has no intention of liberalising its economy.

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