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Thai industrial sector prepares to change as WTO pushes for liberalisation of medical devices

May 26. 2020
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By THE NATION

Thailand’s industrial sector is making moves to adapt to the production of medical equipment in line with the World Trade Organisation (WTO)’s decision to seek collaboration in the production and liberalisation of medical devices.

Amid the Covid-19 crisis, the Thai Garment Manufacturers Association (TGMA) is also calling on the government to set up labs for testing medical masks, personal protective equipment and other textile products, as well as improve the manufacturing standards for these products. This effort is expected to cost around Bt100 million.

Yuttana Silparnvitch, TGMA chairman, said these products currently need to undergo tests in the US or the EU, which takes about three months and costs around Bt300,000 per lot.

The pandemic has hit Thailand’s textile industry hard, with no orders even from the usual customers. The chairman said branching into medical products would help the industry survive and asked the government to grant a soft loan of up to Bt3 billion in order to achieve this.

The plan to enter the medical market is in line with a WTO report on the treatment of medical products in regional trade agreements.

According to the report, a collaboration between members is required on products such as medicines, hand sanitisers and medical masks.

With the Covid-19 pandemic causing huge shortages, the relaxation of trade barriers will help ease the scarcity, the WTO said.

In the regional trade agreement framework, 10 of the largest exporters, accounting for 75 per cent of global export, were in Europe, while 21 per cent of global imports head to the US, 14.3 per cent to China and 85.9 per cent to Switzerland.

WTO also said that if these products were liberalised, 99.5 of it will transpire in developed countries, 84.3 per cent in developing countries and 68.4 per cent in undeveloped countries.

On average, medical products are levied a 0.5 per cent tax rate in developed countries, 11 per cent in developing countries, and 19 per cent in undeveloped countries.

The WTO report also cited provisions on medical devices and medicine under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The provisions cover the registration of medicine and transparency in registration. In addition, the CPTPP also targets future collaborations among members in knowledge and science for the development of the products.

In Thailand, the government has recently exempted tax on medical mask exports until September, and plans to reduce taxes levied on medical devices, Covid-19 indicators and Covid-19-related medicines.

In addition, the value added tax on medical products imported to treat Covid-19 patients has been lifted from March 1 to February 28, 2021.

Last year, Thailand exported medical products worth $3.656 billion, and imported products worth $4.896 billion. Its key export markets include the US, Vietnam, and Japan.

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