December 8, 2004

EU to Return Shrimp Tariff Rights to Thailand

The European Union has agreed to restore preferential tariff treatment for Thai shrimps in return for the country's decision to buy Airbus aircraft, according to a Thai government spokesman on Tuesday.

"We have now found a solution," to what Thailand had alleged was unfair EU treatment of its shrimps in European markets, said government spokesman Jakrapob Penkair.

"The EU will return GSP rights for our shrimps," he said in reference to the generalised system of preferences. "We will only need to wait for the process to go through the European Parliament, which is only formality."

The EU office in Bangkok had no immediate comment on an issue, which had led Prime Minister Thaksin Shinawatra to order Thai Airways International Pcl to delay finalising its Airbus order until the EU lifted restrictions on some Thai food products.

The EU process of reinstating favourable tariff rights for Thai shrimps would take about a month, Jakrapob said.

State-owned Thai Airways plans to buy six double-decker A380s, the world's biggest airliner, one A340-500 and one A340-600 which carry a price list of more than $2 billion.

Thai Airways also plans to buy six Boeing 777-200 ERs.

Government officials and farmers have protested that Thai shrimps faced higher EU import tariffs than those of other Asian producers.

They have appealed to the EU to give Thailand the same treatment as it provided other members of the Association of South East Asian Nations (ASEAN).

The EU levied a four percent import tariff on Malaysian shrimp. However shrimp from Thailand, the world's biggest frozen shrimp exporter, was imposed with 12 percent duty rate.