Economic impact from GSP suspension ‘slight’

The office of Agricultural Economics expects that the suspension of the Generalized System of Preferences (GSP) by the US government would have a negligible effect on food and agricultural products from Thailand.

There will be 573 goods removed from the GSP, of which 157 items including pasta, processed fruit, processed vegetables, green tea, powdered ginger, and shark fin will be subject to higher tariffs. For example, processed fruit exported to the US worth US$45 million/year will be subject to tariffs of 4-14% vs 0%. Also, pasta will be subject to a 6.4% tariff up from 0%. In 2018, pasta exports to the US were estimated at US$30 million.

At the end of October, the Office of the United States Trade Representative announced that it would suspend $1.3 billion of GSP benefits due to Thailand’s alleged failure to adequately provide internationally-recognized worker rights. The GSP suspension will begin on April 25, 2020.

Fishery products, for example shrimp and canned tuna, which are Thailand’s flagship products to the US, will not be affected.

Thailand had a trade surplus with the US of $1.03 billion during the first nine months of this year, ranked 14th among countries with a trade surplus with Washington.