Government calls trade counselor meeting on export strategies

The Thai government is calling a meeting of its trade counselors stationed in 65 countries to brainstorm and map out strategies to strengthen exports during the remainder of this year and through 2017, as some private companies voiced concern that the new U.S. Trade Facilitation and Trade Enforcement Act could prove a barrier to Thai shipments.

The five-day meeting scheduled for September 7 through 11 will be an opportunity to tap the knowledge and experience of the country’s corps of diplomatic trade professionals in order to accurately determine the factors inhibiting Thai exports and devise new strategies to foster their growth. Those attending the meeting in Bangkok will be commercial counselors and trade ministers.

Aside from finding solutions to the short-term situation, the meeting will also map out the Thailand 4.0 national 20-year strategy in terms of trade and exports. Thailand has relied heavily on a diverse basket of exports ranging from commodities to manufactured goods. The new strategy is to transition to higher-value, higher-technology goods through innovation that will drive future economic growth.

Exports have served as the key driver of the Kingdom’s economy for decades, propelling growth rates that reached double digits in the early 1990s and produced an average gross domestic product (GDP) growth rate of above 7 percent since the 1970s. Although shipments have been suffering in a weak global economic environment, investment and consumption – the other two pillars of the economy – have been performing well enough to produce growth rates of roughly 3.5 percent in the first two quarters of this year.

According to the Ministry of Commerce, exports declined 0.1 percent year on year for the month of June to $18.1 billion. That was considered relatively encouraging news, however, as many analysts had expected a steeper drop following an 8 percent fall in April and a 4.4 percent slide in May.

“We are all hopeful that shipments will recover in a positive range in the remaining months,” said Nopporn Thepsithar, chairman of the Thai National Shippers’ Council. “But we cannot rest assured about such growth as the world’s economy remains full of negative factors, while the International Monetary Fund recently cut the global economic growth forecast to 3.1 percent this year from 3.2 percent.”

The woes have not been confined to Thailand. The global shipping industry has registered zero growth so far this year, reflecting tough times in the global economy.

Thailand’s industrial goods have performed positively, especially automobiles and parts, which saw shipments rise over 26 percent in June. Most other sectors, however, especially agricultural goods, experienced declines.

Shipments to China, an important market for Thai goods over the past 15 years, fell by nearly 8.4 percent year on year during the first six months of this year, as the Chinese economy has also been decelerating. Exports to the United States fell by 1.3 percent during the same period.

Vallop Vitanakorn, vice-chairman of the Federation of Thai Industries said that many Thai exporters are concerned about the U.S. enforcement of the Trade Facilitation and Trade Enforcement Act, saying it could prove to be a trade barrier in an important market. The Act bans imports of goods produced by forced labor or prison labor. Globally some products, particularly seafood, have been tainted by revelations that the supply chains involved forced labor and human trafficking.

The Thai government and private sector, however, have been making a serious effort to eliminate those and other abuses.  Two months ago, the United States Department of State raised Thailand’s ranking in its annual Trafficking in Persons Reports, recognizing that Thailand is making a sincere effort to solve the problems of trafficking and labor abuse. Private companies, such as seafood giant Thai Union Group, have been working with international agencies such as the International Labor Organization to clean up supply chains and implement strict traceability measures.

The concern is that continuing transgressions by a small number of unethical operators may unfairly affect all Thai exports, which overwhelmingly are produced free of labor abuse. The Thai government is committed to completely eliminating labor abuse.