Bid to revive slumping exports
THE TRADE Policy and Strategy Office (TPSO) is rushing to draw up plans to stimulate exports and complete negotiations on the Regional Comprehensive Economic Partnership (RCEP) within this year amid fears Thai exports saw a decline in the first quarter of this year due to the prolonged US-China trade war.
TPSO director-general Pimchanok Vonkorpon said that the trade war is partly responsible for causing a slowdown in the global economy and trade.
In 2019, exports of countries around the world have been affected directly or indirectly, with most experiencing slides in exports. About 60 out of 95 countries have witnessed export contraction.
However, some Asian countries, including India and Bangladesh are experiencing continuing strong export of their products. But small economies in Africa and Europe extending from Morocco, Mauritius, and Cyprus to Azerbaijan are also seeing a slowdown.
Despite the drop from last year, Thai exports remain somewhat more resilient to trade tensions between the two world powers when compared to other regional countries.
In the first quarter of this year, Thai exports contracted 1.6 per cent, led by a 9.2 per cent drop in Thai shipments to China. However, shipments to the US surged 32.2 per cent.
Meanwhile, amidst the trade dispute, shipments of some products actually increased. For example, shipments of radio/television receivers and parts soared 21 per cent, followed by an 8 per cent rise in shipments of motorcycles and parts, and a 7.6 per cent bump in shipments of rubber products. Shipments of trucks and food climbed 7 per cent each. Increased shipments of food included canned tuna, fresh, frozen, canned and processed fruit and vegetables, and fresh, frozen and processed chicken.
Pimchanok said that after the US tariff measures against China came into force from the last quarter of 2018 to the first quarter of this year, income from shipments of Thai products directly affected by the US measures fell, but not by a large amount. These products included solar cells and washing machines. Shipments of steel and aluminium continue to expand.
Shipments of Thai products in China’s supply chains have been affected, with a decline in exports of vehicles and parts, computer parts and circuit boards, electrical appliances and parts, machines, tools and components, and office/home supply.
Meanwhile, the US is bound to import more from Thailand, particularly of products that will be substitutes for Chinese goods on which the US has raised tariffs.
This could partly offset a decline in products exported to China, including automobiles and parts, electrical appliances and parts, machines, tools and parts, chemical products and pellets, garments, jewellery and cosmetics, and office/home supply to China. Thai exports continue to have opportunities amidst the impacts from the ongoing trade spat.
Thailand’s Commerce Ministry is continuing to closely monitor the situation, and will proceed with its planned trade promotion activities both offline and online throughout the year, Pimchanok said.
Such plans extend from market penetration by city/province; acceleration of negotiations to open markets especially through the Rcep agreement, which includes 16 countries – Asean nations, Australia, China, India, Japan, New Zealand and South Korea – within this year; solutions to trade problems and obstacles; creation of strategic partnerships with potential trading partner countries; and promotion of border trade.
Technological changes have made products in some industries outdated. The Thai government has responded with a policy to attract foreign direct investment in modern industries as a means to encourage technology transfer and innovations.
That policy and related measures are a part of the government’s attempt to stimulate and promote Thai exports, while strengthening the Thai economy in the short and longer terms, said Pimchanok.