Thai shrimp exports affected by new EU system

Friday, 06 July 2012 From Issue Vol. XX No. 27 By  MCOT

Thai shrimp exports will be impacted by the European Union (EU) generalized system of preferences (GSP), according to Somsak Paneetatyasai, president of the Thai Shrimp Association.

He said the industry’s trend is worrisome since prawns have been listed among 57 Thai goods put under the EU’s new GSP.

In the new tariff, 12 percent is to be applied to raw shrimp from the current 4.2 percent, and 20 percent to cooked and seasoned prawns - up from the current 7 percent. As a result, Thai prawns exported to the EU market could shrink to less than 5 percent, from the current 20-25 percent of Thailand’s total exports, and over 2 million persons in the system, including shrimp farmers will be affected.

A similar situation happened in 1997 when Thailand was the only country cut out of the preference arrangement.

The GSP changes meant that Thai shrimp entrepreneurs lost their markets to more competitive countries from about 30,000 tonnes of prawns exported to only a few hundred tonnes.

Somsak asked the government to find aid measures to help, whether by negotiations on GSP or a free-trade agreement with the EU, in order that the competitiveness of Thai shrimp exports could be resumed. Thailand’s major competitors - Vietnam, Indonesia, China, and India - have better tariffs than Thailand, while Malaysia has a free trade agreement with the European Union.

From January through April, about 92,000 tonnes of Thai prawns were exported for Bt26 billion, a decrease of 10 and 3 percent respectively compared to the same period last year, partly due to a cut of over 20 percent of Thai shrimp exports to US.

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