August 22, 2006

 

Thailand's chicken and feed industry opposes EU import tariff hike

 

 

Thailand's chicken and feed industry Monday urged the European Union to withdraw its decision to raise import tariffs on Thai cooked chicken products.

 

Thailand is the biggest exporter of cooked chicken products to the EU.

 

Representing the industry were officials from 12 poultry-related associations, including the Thai Broiler Processing Exporters Association, the Broiler Association, the Broiler Breeder Association, the Thai Livestock Association, the Thai Feed Mill Association and the Feed Stuff Users Promotion Association.

 

"(The tariff increase) will destroy the livelihood of Thai farmers and violate the notion of free trade," the officials said in a statement, which they presented to the Head of the Delegation of the European Commission in Thailand.

 

At the same time, around 700 chicken farmers and representatives from related industries demonstrated at the EU delegation's office in Bangkok, expressing their displeasure over the impending tariff change.

 

The EU plans to raise existing import tariffs on chicken products of all origins to as high as 53 percent from 15.4 percent for salted chicken, 10.9 percent for cooked chicken and 8.5 percent for turkey.

 

The new tariffs are scheduled to take effect Sep 15.

 

"The proposed tariff increase of cooked chicken products will definitely aggravate the economic situation for Thai farmers, since the EU is one of the country's major exporting markets, accounting for 40 percent of total Thai exports of chicken meat," according to the statement.

 

Thailand exported 276,534 tonnes of cooked chicken products in 2005 worth US$795 million, of which 113,195 tonnes, or US$325 million, were to the EU, according to data from the Thai Broiler Processing Association.

 

In Jan-Jul 2006, it exported 67,555 tonnes of cooked chicken products worth US$204 million to the EU, data from the association showed.

 

After the first outbreak of bird flu here in 2004, Thailand has been exporting to the EU only cooked chicken products. Bird flu remains a concern in the country as new cases emerged among poultry in July.

 

The EU delegation to Thailand said in a statement Monday that a quota system will be introduced under the new tariff regime. Imports falling within quotas will continue to be taxed at current rates, but those in excess of the quotas will be subjected to the new tariffs.

 

"Our aim is to streamline the system of EU tariff levels for these products. The changes will not affect Thailand's traditional export volumes," Jean-Jacques Bouflet, Trade Counsellor at the Delegation of the European Commission to Thailand, said in the statement.

 

"Due to a considerable export surge in recent years from a number of countries including Thailand, we need to control future expansion," he said. Discussions on quota levels will take place in early September between the European Commission and various supplying countries including Thailand, the statement said.

 

However, in line with World Trade Organization rules, the negotiations could lead to compensation for Thailand for loss of trade resulting from the changes, and any possibly compensation will depend on the size of quotas negotiated with EU counterparts and any likely impact on future trade prospects, Bouflet said in the statement.