Since Thailand's economy has grown rapidly since the trade favor program was launched 30 years ago, the U.S. said Aug. 8 it was reviewing whether to renew duty-free benefits. Thailand is among 13 countries facing the review of duty-free benefits known as the Generalized System of Preferences (GSP), which is up for renewal ahead of its expiration in December 2006. The 13 countries, which include India, Russia and South Africa, were under review as they were classified as "an upper-middle-income economy" by the World Bank in 2005.
"The US TR (Trade Representative) is looking to decide whether to limit or change or completely withdraw GSP privileges or do nothing at all," Peter Thorin, an economic officer at the U.S. Embassy in Bangkok, said. The program was launched in 1976 to help developing economies by imposing no tariffs on their imports to the U.S.
The duty-free benefits cover 18% of Thailand's exports to the U.S, which rose 10% year-on-year to $17.1 billion in 2005. Thai export goods under the GSP program are mainly light products such as jewelry, wooden frames for paintings and bags for packing goods, the US embassy said. If Thailand loses duty-free privileges, the U.S can impose tariffs ranging from 2-14% on these items.
The United States ended the GSP benefits to Hong Kong, Singapore, South Korea and Taiwan in 1989 and Malaysia in 1997.
Copyright Agence France-Presse, 2006