SATURDAY, March 02, 2024
nationthailand

FTI seeks urgent action as domestic industries suffer from cheap imports

FTI seeks urgent action as domestic industries suffer from cheap imports

Many domestic industrial groups were struggling to survive as cheaper, substandard imported goods were flooding the market, the Federation of Thai Industries (FTI) said.

 

These imported goods were often falsely labelled, fake and/or substandard, and clandestinely brought in and sold at prices 10-20% cheaper than the domestic counterparts, the FTI said.

The consequences have been serious for Thai companies, the FTI said. Bangkok Iron and Steel Works Co Ltd recently announced that it was laying off over 380 employees. The company has been facing continuous losses for several years due to cheap foreign steel flooding the market, making Thai steel uncompetitive. Production had to be curtailed. Although the Ministry of Commerce extended the anti-dumping tax for another five years, it has been of limited help. These dubious goods suppliers employ various methods to avoid the anti-dumping tax, the FTI said.

More than 20 domestic industries have been hit by the cheap imports, over 50% of which are from China. Such cases are similar to the problem of illegal pork imports which has led to significant losses for Thai swine farmers who struggled to compete and had to shut down in large numbers. Most of the illegally imported pork posed health risks due to possible contamination as they had long passed their consumption expiry date.

The FTI said it had received complaints from over 20 industrial groups affected by the influx of substandard low-priced products. They urged responsible authorities, including customs, border control, and others, to intensify efforts to prevent unchecked imports. They advocate enforcing industrial product standards before distribution.

 

Urgent actions are necessary, as failure to do so would significantly impact various Thai industries, leading to reduced production capacity, decreased sales, unbearable losses, and the closure of businesses, similar to the recent steel manufacturing closures, the FTI warned.

Among the recently closed steel factories were long-standing FTI members, who could not cope with the overwhelming competition from cheap foreign steel imports that caused prolonged losses. Without a prompt resolution, this influx of substandard foreign goods would persist, potentially leading to numerous factory closures next year. This would heavily damage the Thai economy and industries, the FTI warned.

The FTI had earlier revealed that at least 20 industrial groups out of 45 had been impacted by the influx of low-priced imported products. Currently, the situation has not shown signs of improvement.

The industries impacted by more than 10% include metallurgical machinery, agricultural machinery, electrical and electronics, furniture, medical instruments, chemicals, glass and glassware, foods, beverages, meats/animal products, jewellery and ornaments, textiles and paper, printing and packaging, automobiles, automotive parts, wood pulp, ceramics, creative industries, casting, and steel. Industries affected by a 5-10% increase include plastics and petrochemicals.

Chinese products are dominating online markets, Pawoot Pongvitayapanu, the managing director and founder of the website

TARAD.com said, adding that Chinese products were increasingly infiltrating online channels due to convenient transportation. Moreover, Chinese traders exploit free trade channels, evading taxes by storing products in free zones. Despite state measures to regulate through the Food and Drug Administration or the TISI standards, the quantity remains unchecked. Chinese traders hire Thai influencers to sell through platforms like TikTok Shop, gaining popularity.

The influx of Chinese products in this region has prompted some countries to take action. In Indonesia, for instance, more than 50% of Chinese products are sold through TikTok Shop. Consequently, the government prohibited TikTok from offering TikTok Shop services in Indonesia, allowing only social functions. In Thailand, it's estimated that over 50% of online sales involve Chinese products. The government must take control as this poses a threat to local entrepreneurs, the FTI said.

Mongkol Sukcharoenkana, chairman of the National Fisheries Association of Thailand, said that apart from the impact of low-quality and low-priced imported goods, the Thai fishing sector has seen a significant increase in imported seafood from neighbouring countries such as Myanmar, Vietnam, Malaysia, and Cambodia since 2014. This has drastically reduced prices, causing many fishermen to operate at a loss.

 

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