Bangkok: Senior economists have called on the government to urgently assist the private sector in adapting to the newly imposed 19% import tax by the United States. Dr. Somchai Phakphasnwiwat, an independent economist and political scientist, emphasized the need for prompt action to mitigate the effects of this significant tariff increase from the previous 2.5% to 17%.
According to Thai News Agency, Dr. Somchai highlighted that the 19% import tariff imposed by the US on Thailand mirrors similar tariffs on neighboring countries and represents a new form of trade barrier in the modern world. He urged the government to consider several measures to address this impact, including promoting cost reduction in production to maintain competitiveness in the US market, which remains vital for Thailand.
Dr. Somchai pointed out the influx of Chinese goods flooding into Thailand as they face export restrictions to the US. He recommended that the government and private sector collaborate to enforce anti-dumping and anti-subsidy measures. Additionally, the private sector is encouraged to adapt costs and enhance competitiveness.
The impact of these tariffs has been significant, with Thai exports projected to grow by only 4-5% by the end of 2015, a decrease from the 10% growth in the first seven months. This slowdown is attributed to the Thai economy's underperformance relative to its potential. To counter these effects, Dr. Somchai suggested exploring new export markets such as Latin America and utilizing the United Arab Emirates as a gateway to the Middle East.
Furthermore, Dr. Somchai urged the Thai government to expedite Free Trade Agreements (FTAs) with additional countries. Current negotiations with the European Union and the United Arab Emirates should be expanded to include more global partners. The private sector should prepare for these FTAs to leverage origin rights within these countries, enjoying 0% tariffs, and consider exporting alongside investments.
In the digital age, Dr. Somchai stressed the importance of upgrading Thai products and services to meet world-class standards. The past loss of competitiveness was attributed to high production costs, and he emphasized the need to focus on production-based measures. Over the last 14 years, Thailand's economy has grown by an average of only 2.5%, resulting in its GDP ranking ninth in ASEAN. Improving the efficiency and effectiveness of Thai products and services is crucial for future growth.