BANGKOK, Jan 6 — The Ministry of Foreign Affairs has explained that the European Union now excludes Thailand from its Generalized System of Preferences (GSP) because of changes in its trade policies.
The European Union stopped all GSP privileges for Thailand, China, Ecuador and the Maldives on Jan 1.
Some privileges for Thailand ended earlier, but this time severe restrictions also impact the export of shrimp and squid.
The Department of Foreign Trade at the Ministry of Commerce estimates that the GSP exclusion may cause Bt30 billion in damage, nearly 4 per cent of the value of Thai exports to the EU or 0.3 per cent of the total value of Thai exports.
The GSP was introduced in the form of tariff reduction in 1971 to allow developing countries to sell their products to the EU to improve their economies.
The EU now excludes Thailand, China, Ecuador and the Maldives from its GSP because the World Bank has defined them as upper-middle income countries from 2011 to 2013.
The European Union informed Thailand and other trading parties of the decision in December 2012 and had Thailand adjust for the change last year.
The Ministry of Foreign Affairs stated that the GSP exclusion of Thailand had nothing to do with any political situation in the country or with bilateral relations between Thailand and the EU and EU countries. It said that the relations and cooperation on economic affairs, trade, education, tourism, research and development continued as usual.
Since being informed of the EU’s decision, the Ministry of Foreign Affairs warned the Thai private sector of the exclusion and led the Thai business community to other countries to find new markets instead of Europe.
