EU deprives Thailand from GSP, relations remain intact

BANGKOK, January 6 (TNA) - The Ministry of Foreign Affairs reports that the European Union (EU) has excluded Thailand from its Generalized System of Preferences (GSP) due to a change in its trade policies, but relations between Bangkok and the European trade bloc remain intact. The ministerial report, released on Tuesday, said that the EU has stopped all GSP privileges for Thailand, China, Ecuador and the Maldives as of January 1, 2015. The report acknowledged that the EU has excluded Thailand, China, Ecuador and the Maldives from its GSP, after the US-based World Bank had defined them as upper-middle income countries from 2011 to 2013. According to the report, the EU informed Thailand and the other trading parties of the decision on December 18 2012 and Thailand, thus, had some times to adjust for the change. Earlier, the EU ended GSP privileges for some Thai exports and this time severe impacts go to Thai exports of shrimps and squids. The Ministry of Foreign Affairs stated that the EU's GSP exclusion for Thailand has nothing to do with any domestic political situation or with bilateral relations between Thailand and the giant European trade bloc. The official report stressed that Thailand-EU relations and cooperation on economic affairs, trade, education and tourism, as well as research and development remain as usual. Since being informed of the EU’s decision, the Ministry of Foreign Affairs has warned the Thai private sector of the exclusion and led Thai business operators to other countries to find new markets, instead of the EU. Meanwhile, the Ministry of Commerce's Department of Foreign Trade estimated that the EU's GSP exclusion may cause damage worth about 30 billion baht, accounting for nearly 4 per cent of the value of Thai exports to the EU or 0.3 per cent of the total Thai export value. GSP has been introduced in the form of tariff reductions since 1971 to allow developing countries to sell their products to the EU to boost their economies. (TNA)