July 24, 2006

US to make a decision on shrimp bonds in early August

Thai shrimp-exporters exporting to the US would know by early August whether the bond they have to place on their shrimp shipments still stands, said Nuntawan Sakuntanaga, deputy director-general of the Foreign Trade Department.

Sakuntanaga also added that Thailand's complaint against the US would be withdrawn if it stopped collecting the bond.

Thailand has previously filed a WTO complaint against the US for using unfair trade practices to protect its shrimp industry. The complaint also pointed to the US demand for a bank guarantee on all Thai shrimp imports as an unfair trade practice.

Nuntawan said the result is hard to predict.

Last week's talks between the two countries' officials gave positive signs that the bonds on shrimp would be cancelled. However, the US Customs Department have insisted that the bank guarantee, which by some accounts can reach up to US$1 million, was normal practice that protected its domestic market.

The US bond is said to be hurting Thai exporters' as they were either saddled with higher costs or were forced to take sales reductions because of the requirement.