June 24, 2005

Thai shrimp exporters disappointed over EU decision to delay privilege for lower tariff

Thai shrimp exporters say they will lose sales of at least two billion baht after a decision by the EU to postpone the introduction of lower import tariffs for six months.

Reduced tariff rates under the EU's Generalised System of Preferences (GSP) were supposed to take effect on July 1 and last for three years. In anticipation of the restoration of these tariff privileges, several exporters had already made contact with importers in the EU.

Fresh shrimp exports from Thailand to the EU dropped to less than 1,000 tonnes in 2003 and recovered to 2,431 tonnes in 2004. However, last year's total was still far behind the 7,743 tonnes recorded in 1999.

This latest development will place further constraints on Thai shrimp exporters who are also struggling in the US, the largest market for the country's shrimp. The US since December has imposed anti-dumping duties on Thai shrimp, at a rate of 5.95 percent. To make matters worst, Washington in March added a requirement for a bond to cover projected penalties, an expense that many small operators cannot afford.