Thailand should quickly negotiate and conclude a Free Trade Area agreement with Europe in the absence of a Generalized System of Preferences offered by the European Union, said Suttinee Poopaka, executive director of the Thailand Textile Institute.
The EU has cut GSP privileges to several countries, including Thailand, since January 1 after the World Bank redefined them as upper-middle income countries from 2011 to 2013.
Suttinee told a seminar in Bangkok that Thailand must pay duty as high as 12 percent now for products exported to the EU, impacting the country’s competitiveness with countries such as Indonesia, Vietnam, Cambodia, Laos and Myanmar which still enjoy GSP privileges.
Vietnam currently holds an economic strategic partnership under the Trans-Pacific pact with the US and is opening an FTA with the EU.
If it succeeds, Vietnam would enjoy a zero duty on its goods exported to the US and to the EU, she said.
Suttinee advised that Thailand should conclude an FTA agreement with Europe as soon as possible as well as boost its production competitiveness in its textiles and garments.
Several Thai manufacturers of brand name products have now relocated their production bases to neighboring countries, including Cambodia which still enjoys GSP privileges, she said.
The producers have also been impacted from a hike of daily minimum wage to Bt300 in the country.
