April 3, 2006

Thailand files complaint to WTO over US shrimp bonds
 

Thailand has filed a case against the United States with the World Trade Organisation accusing it of unfair trade practices, Thailand's Foreign Trade Department announced on Sunday ( Apr 2).

The department said the US was implementing double measures against Thai shrimp exports through a continuous bond (C-bond) with a 100 percent bank guarantee and an anti-dumping duty.

Poj Aramwattananont, president of the Thai Frozen Food Association, said C-bonds are expected to cost shrimp exporters an estimated US$100 million this year, on top of an anti-dumping duty of about 5 to 7 percent.

Last year, Thai exporters paid US$50 million for C-bond guarantees, and have yet to get it back.

The Commerce Ministry filed the case with the WTO in March, and is now waiting for documents from exporters to support the case. The petition process should proceed swiftly after all the documentation were sent to the Thai WTO office in Geneva next week, said Rachane Potjanasuntorn, director-general of the Foreign Trade Department.

It will take about a year to reach a final WTO judgement, but if the US agrees to cancel the continuous bond within 60 days of the formal consultation, the petition will be cancelled.

The case is the first petition to the WTO filed by a shrimp-exporting nation imposed with the double penalty, although India, China, Ecuador and Vietnam also face anti-dumping duties and C-bonds.

The move came about after shrimp farmers threatened to protest outside the ministry unless it took action to sue the US.

Meanwhile, private Indian companies have raised a case against the US at an American court because of the same double penalty.