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THAILAND: Loss of GSP Status Set to Hit US$1.3 Billion Worth of Exports to US

Some US$1.3 billion worth of exports from the country – across 573 product categories – are set to lose their duty-free access to the US market as of 25 April 2020. Their previous entitlement, under the terms of the US Generalised System of Preferences (GSP) programme, has been rescinded by Presidential Proclamation and, once the measure comes into effect, the items concerned will be subject to tariffs of up to 4.5% upon import to the US market. Ultimately, it is expected that this may see US-bound Thai exports fall by between $28.8-32.8 million next year.

The US move is supposedly in response to Thailand’s alleged failure to ensure workers’ rights in a number of internationally-mandated areas, including collective bargaining and freedom of association, especially within the country’s fisheries and shipping industries. The move also comes in the wake of Thailand introducing a ban on the herbicide glyphosate, which is expected to have a negative impact on the volume of permitted US agricultural exports to the country. This has led to speculation that the latest US move may be related to the Thai ban, although both Thai and US officials have denied any connection.

The list of items affected by the loss of GSP status includes a wide range of seafood products, eyewear, ceramics, electric circuits, liquid soaps and derivatives, fans, electronics, automobiles, motorcycles, chemicals, fertilisers and substantial number of agricultural goods. A full list of the affected items can be accessed here.

Content provided by Picture: HKTDC Research
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