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THE COMPETITION IN 1997
U.S. and
Competitor Expenditures on Export Promotion and
Export Subsidies for Agricultural, Forestry and Fishery Products
Thailand
Thailand is a leading exporter of rice, poultry meat and seafood, largely based on its ability to provide competitively priced products to regional markets. The government of Thailand operates several types of programs to boost agricultural exports, including export credit programs, enhancement of food industry export competitiveness and a new "Hard Sale" market promotion initiative. The only available expenditure information is the planned 1998 budget of $5.6 million for the "Hard Sale" campaign, which will be spent on promotion of jewelry and apparel exports as well as on processed food products.
The Ministry of Commerce, through its Department of Foreign Trade (DFT) and Department of Export Promotion (DEP), is the major actor in Thailand's export market promotion program. The DFT is involved primarily with rice and other bulk commodities, while the DEP is more involved with trade shows and missions. For some trade shows, participation by Thai exporters is encouraged through assistance with booth fees (up to 90 percent of the cost) and shipping of samples. The DEP plans to initiate a new export promotion campaign in 1998, labeled "Hard Sale". The campaign will focus on food, jewelry, and garments and the primary target market is Asia, particularly the ASEAN region. The current economic crisis is forcing the government to cut back its financial support of the program, however, and the budget will not exceed 196 million baht ($5.6 million). Activities under the "Hard Sale" campaign include trade shows, trade missions, in-store promotions and other, similar events. DEP has conducted these types of activities for a number of years, but officials intend for the new campaign to be more directed and more effective. In an effort to support this strategy, the Ministry of Commerce is also reorganizing its Commercial Offices in Thai embassies. Staff in these offices have been instructed to focus on export promotion rather than their more traditional trade policy and reporting functions. Thailand's neighbors in ASEAN and the wider Asia-Pacific region will be specifically targeted in the 1998 export promotion campaign. Thailand will take advantage of major trade shows, like ANUGA, and similar opportunities to maintain a presence in other markets.
The government and industry are also planning to enhance the competitiveness of Thai food exports by improving and ensuring the quality of food production and reducing costs. For example, the Thai Food and Drug Administration is drafting a new Food Law that will standardize the quality of food exports. Part of this effort includes the establishment of the National Food Import-Export Inspection and Certification Scheme which is designed to streamline and centralize the certification process. Another part is the plan to begin certifying food exporters, particularly poultry meat exporters, as meeting the ISO 14000 standards. The private sector is also proposing new programs to enhance Thai export competitiveness. The National Food Institute, with the support of the Thai Industries Federation, is proposing a 2 billion baht ($57 million) program to improve the competitiveness of Thailand's food products. Longon, pineapple, sugar, shrimp, and poultry are the five commodities that would be targeted under the program. The purpose is to improve quality and reduce production costs. Financial aid to these sectors would include soft loans, low interest rates, and repayment periods of five to seven years. The Ministry of Commerce also supports the program, but government financing has not yet been secured.
Finally, Thailand operates an export credit, or packing credit, program which is designed to promote agricultural and industrial exports. Under the program, a loan is granted to accredited exporters by commercial banks when the exporter places a promissory note with the bank. Generally, the amount of the loan is equivalent to the value of the promissory note which is based on the sales and export documents. The interest rate on the loan must not exceed ten percent per annum. The Export-Import Bank of Thailand refinances 50 percent of the promissory note's value to the commercial bank at an interest rate of 5 percent. The credit terms cannot exceed 180 days. Approximately $790 million under this program was available to rice exporters in 1996/97. In the agricultural sector, lesser amounts are available for rubber and tapioca exports.
Thailand is also engaging other nations bilaterally and multilaterally in an effort to remove tariff and other restrictions to trade. For example, it has been an active participant in the APEC process for negotiating sectoral liberalization initiatives, designed to reduce trade barriers among Asian and American countries.
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