Bangkok: The United States is intensifying efforts to open the markets of its trading partners and manage local content requirements in a bid to counter China's influence in global supply chains.
According to Thai News Agency, Mr. Pichai Chunhavajira, Thailand's Deputy Prime Minister and Minister of Finance, who leads the country's international trade negotiation team, emphasized the complexity and challenges in ongoing negotiations with the United States. Despite the US's unilateral demands, Thailand is committed to prioritizing its national interests while maintaining a balanced relationship with other trading partners.
Mr. Pichai highlighted that the US's primary goal is to encourage trading partners to open their markets extensively and to focus on using a higher proportion of domestic raw materials in the production of goods exported to the US. This move aims to reduce reliance on supply chains from China, an issue that requires careful analysis from Thailand. The US's approach includes managing "Local Content" to prevent "impersonating origin" or "Transshipment" products, which it views as essential in minimizing dependency on Chinese supply chains. However, Thailand is yet to determine the specific level of local content required by the US, which remains a critical issue to resolve.
The Deputy Prime Minister reiterated that while opening the Thai market, the government must ensure the maximum benefit for the country and minimize adverse effects on the agricultural sector and SMEs. This includes considering products and raw materials essential to Thailand, such as soybeans for animal feed, energy, and products covered by existing FTAs, like tilapia and longan, which the US has requested Thailand to open up.
To support the private sector, Mr. Pichai mentioned that the government has set aside a 200 billion baht budget for investment support and credit access, currently under discussion with state and private banks. These funds aim to help businesses adjust cost structures and production lines to meet new trade conditions.
Amid potential challenges from US tax measures, Mr. Pichai sees an opportunity for Thailand to restructure its economy, particularly the manufacturing and export sectors. By increasing reliance on domestic supply chains and reducing import vulnerabilities, and by shifting the tourism sector towards "quality tourism," Thailand can create value and adapt to evolving target group needs.