Wednesday, August 21, 2019

FTI alarmed as US tariff aim widens to include Asean

Jul 22. 2019
Montri
Montri
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By THE NATION

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The Federation of Thai Industries (FTI) will urge Apec countries at the upcoming Asean-Apec meeting to find solutions to current trade tensions and pursue free-trade policies.

The US-China trade dispute is having a knock-on effect in Southeast Asia, vice chairman Montri Mahaplerkpong said this week, with Washington now claiming that Chinese products are being exported to the US via Vietnam under the guise of Vietnamese goods.

The US could implement measures to reduce Vietnamese exports, damaging the Thai economy because Southeast Asia as a whole represents Thailand’s top export destination, accounting for 25 per cent of total exports, Montri said.

He warned that the US could target Asean member-countries one by one, starting with Vietnam, which has a large trade surplus with the US, as does Thailand.

Vietnam ranks 20th on the list of countries with significant trade surpluses with the US and Thailand 11th, according to Montri.

The top nine nations on that list are at risk of trade tariffs from the US, he said. Thailand’s trade surplus is projected to rise due to an upsurge in Chinese investment aimed at establishing manufacturing bases here. Thailand is thus at risk of being caught directly in the trade-war crossfire.

Montri said the impacts on Thailand from ongoing trade tensions between Japan and South Korea remain limited, but if they impose tariffs on one another, Thailand would suffer because it exports electronic and automotive parts to both.

He does not expect Thailand to be harmed by US trade tensions with India and the European Union, but cautions that trade spats around the world will hurt the global economy and ultimately Thai exports. Countries should thus be embracing free trade to boost global growth.

The FTI will be represented at the Asean-Apec meeting at the end of July to encourage all Asean nations to push for free trade among the 21 Apec countries, including the US, China, Japan and South Korea.

Representatives of the private sector in each country will jointly submit suggestions to that effect at the meeting, Montri said.

“The trade-war issue has not been widely discussed at these meetings in the past. If all members cooperate to find a solution, then there is potential for progress to be made.”

He believes the government should be preparing now to cope with the expected fallout, such as by diversifying export destinations and reducing exporters’ reliance on countries such as China. Thai manufacturing parts going to China have dropped off alarmingly due to the US tariffs, he noted.

Thailand should also focus more on exporting consumer goods, such as durian and other fruits, for which the overseas market is growing strongly, he said.

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