July 2, 2012

New EU system affects Thai shrimp export

Somsak Paneetatyasai, president of the Thai Shrimp Associated stated that the country's shrimp export will be affected by the EU generalised system of preferences (GSP).

He said the industry's trend is worrisome after prawns were listed among 57 Thai goods put under the EU's new GSP.

In the new tariff, a 12% is to be applied for raw shrimp from the current 4.2%, 20% applies for cooked and seasoned prawns--up from the current 7%. In result, Thai prawns exported to the EU market could shrink to less than 5%, from the current 20-25% of Thailand's total exports, and over two million persons in the system, including shrimp farmers will be affected.

A similar situation happened in 1997 when Thailand was the only country cut out of the preference arrangement.

The GSP changes meant that Thai shrimp entrepreneurs lost their markets to more competitive countries from about 30,000 tonnes of prawns exported to only a few hundred tonnes.

Somsak asked the government to find aid measures to help, whether by negotiations on GSP or a free-trade agreement with the EU, in order that the competitiveness of Thai shrimp exports is resumed. Thailand's major competitors--Vietnam, Indonesia, China, and India--have better tariffs than Thailand, while Malaysia has a free trade agreement with the EU.

From January-April, about 92,000 tonnes of Thai prawns were exported for THB26 billion (US$822.5 million), a decrease of 10% and 3% respectively compared to the same period last year, partly due to a cut of over 20% of Thai shrimp exports to US.