Following the United States’ announcement on October 25, 2019, to suspend Thailand’s Generalized System of Preference (GSP) privileges, citing that Thailand has not yet been able to bring labor rights up to international standards,
It will come into effect on April 25, 2020, which is just over a month away.
– This GSP cut affects 573 products (total value of approximately US$1.3 billion or approximately 40 billion baht that Thailand receives each year).
– Covers 1 in 3 Thai products that receive GSP privileges.
– All types of seafood products will be stripped of GSP privileges due to long-standing labor problems in the fishing industry.
effect
– The overall GSP privilege elimination, Thai entrepreneurs must pay taxes from 0% to an average of 5%, or an amount of approximately 1,500-1,800 million baht.
– There will be higher costs, which will reduce competitiveness.
– It will affect Thai exports to the United States.
Thai exporters will have to adapt to increase their competitiveness and try to find new markets to reduce the impact on Thai exports to the United States.
Another concern for many parties is that entrepreneurs may move their production bases to other countries that still receive GSP privileges, which will lead to unemployment problems.
