Thai Union will shift shrimp from EU in case of tariff change

News 13:52 07/08/2012 KT
(IntraFish) Thai Union would have to shift its shrimp from Europe to other markets if tariffs go up as part of a change to Thailand’s GSP status, its president tells IntraFish.

Thai Union Frozen Products would be forced to shift its European shrimp sales to other markets if higher tariffs are imposed on Thai shrimp exports under a revision of the European Union (EU) generalised system of preferences (GSP), its president said.

If the report is ratified -- a process currently underway -- then Thailand would effectively be out of the European market, “given the fact that all our other competing nations remain with GSP,” said Thiraphong Chansiri, president of Thai Union, one of the world’s top five shrimp exporters.

“Well, if it happens, then we will shift our products to other markets,” he told IntraFish.

Charoen Pokphand Foods, the world’s largest shrimp farmer, said it will shift its production to Malaysia and Vietnam if privileges are withdrawn in January of 2014.

Thai Union, however, has “no plan to relocate our operation,” said Chansiri. The Thai government is lobbying on the issue. “Our Ministry of Commerce is working closely with EU authorities to maintain Thailand in the list,” said Chansiri.

Thailand is also thought to be looking to negotiate a free trade agreement with the EU, which would take the tariff down to zero.

The new GSP imposes a tariff of 12 percent to raw shrimp compared to the current 4.2 percent and a 20 percent tariff to cooked and cocktail shrimp up from the current 7 percent.

The lower rate is given to countries categorized by the World Bank as lower middle income, and the bank has shifted Thailand’s status from lower middle income to middle income, as the country’s per capita income exceeds $3,700 (€3,010), the cut-off for GSP eligibility. The EU has granted trade preferences to developing countries through the GSP scheme since 1971.

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