August 9, 2006

US rejects Thailand's plea to drop shrimp bond

Thailand has failed to persuade the US to scrap a bond requirement that has burdened Thai shrimp exporters.

Consultations between the two countries reached an impasse early this month, according to the Thai Foreign Trade Department. The consultation was part of the initial stages required after Thailand filed its complaint against the US with the WTO.

Thailand said the US was taxing its shrimp twice, through the bond requirement and anti-dumping duties.

US importers must post a bond, equal to the value of expected anti-dumping penalties on Thai shrimp based on past shipment volumes. The bond is normally borne by Thai exporters. Since it is non-refundable until penalties expire, it causes cash flow problems for Thai exporters.

Thailand may join India against the US in the dispute settlement panel if both countries still cannot reach an agreement, said Nuntawan Sakuntanaga, the department's deputy director-general.

Nuntawan said the office of the US Trade Representative (USTR) appeared willing to drop the bond requirement but the US Customs Department held on.

The USTR earlier proposed reducing the bond to less than 100 percent of estimated penalty duties for Thai exporters with exemplary records. However, the proposal went nowhere.

Anti-dumping duties were imposed 3 years ago when US shrimpers complained that Thai exporters were dumping their shrimps in the US.

Thailand has argued that it was unfair to compare the costs of Thai shrimps raised in farms with the higher cost of US shrimp, which were mainly caught at sea.