U.S. renews GSP privileges for Thailand
Thailand’s Ministry of Commerce and thousands of exporters expressed approval last week at United States President Barack Obama’s decision to renew and extend the Generalized System of Preferences (GSP), raising hopes that it can help boost Thailand’s export growth during the second half of this year.
“Even though Greece’s debt crisis could cause lower import demand from the European Union, the regaining of GSP should help promote Thai shipments, as the U.S. accounts for 11.1 per cent of the country’s total exports,” Commerce Minister Chatchai Sarikulya said upon receiving the news.
The signing of the Trade Preferences Extension Act by President Obama on June 29 will benefit 127 countries that trade with the United States. Analysts have said that Thailand benefits more from the GSP system than any other country except India. The U.S. is Thailand’s second-largest export market, according to The Nation newspaper, exceeded only by total exports to the Association of Southeast Asian Nations (ASEAN).
The value of Thai shipments to the U.S. grew by 5 percent year on year in the first five months of 2015 to $9.86 billion. The Ministry of Commerce will call a meeting next week of suppliers to the U.S. to help develop a marketing plan to promote more trade between the two allies.
The Generalized System of Preferences is a system that reduces import tariffs on a range of goods coming from certain countries, especially developing countries. It is designed to circumvent the World Trade Organization rule that requires countries to set tariff rates at the same level for trading partners that have received Most Favored Nation status and those that have not.
The Office of the U.S. Trade Representative says on its website that “in addition to promoting economic opportunity in developing countries, the GSP program also supports progress by beneficiary countries in affording worker rights to their people, in enforcing intellectual property rights, and in supporting the rule of law. “
The GSP program expired in July 2013. The signing by President Obama now extends the Act until the end of 2017. Exporters to the United States are entitled to file for rebates or refunds for the amount of higher tariffs they paid during the period when the Act had lapsed.
The Ministry of Commerce estimates that about $200 million in rebates could be available to Thai exporters. The products eligible for tax refunds include cooked foods, air-conditioners, rubber gloves, electrical harnesses for vehicles, ceramic products for sanitary-ware products and car keys.
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