Kingdom takes US to WTO over shrimp

Thailand has filed a case against the United States with the World Trade Organisation accusing Washington of employing unfair trade practices and targeting Thai shrimp exports, the Foreign Trade Department said yesterday.

The department accused the US of implementing double trade protection measures against Thai shrimp exports through a continuous bond - a 100-per-cent bank guarantee payment - and an anti-dumping duty.

The Commerce Ministry filed the case with the WTO on March 16, has employed lawyers to sue the US, and is now waiting for documents from exporters to support the case.

Rachane Potjanasuntorn, director-general of the Foreign Trade Department, said that by next week all the documentation should be sent to the Thai WTO office in Geneva - and then the petition process should proceed swiftly.

It will take about 12 to 14 months to reach a final WTO judgement, but if the US agrees to cancel the continuous bond within 60 days of the formal consultation, the petition will be cancelled.

'We are confident Thailand will win the case because the US has acted unfairly,' he said.

If the Kingdom wins the case, the US will be forced to cancel its current measures and others countries could benefit.

The US charges the continuous bond (C-bond) on shrimp exports from countries subject to anti-dumping duties.

The case is the first petition to the WTO filed by a shrimp-exporting nation suffering from the double penalty, although India, China, Ecuador and Vietnam also face anti-dumping duties and C-bonds.

The move came after about 100 shrimp farmers from Trang, Surat Thani and Krabi threatened to protest outside the ministry unless it took urgent action to sue the US. Poj Aramwattananont, president of the Thai Frozen Food Association, said shrimp exports are estimated to generate about US$100 million (Bt3.9 billion) for the C-bond this year, besides facing an anti-dumping duty of 5.79 to 6.82 per cent of a shipment's value.

Last year, Thai exporters paid $50 million for C-bond guarantees, and are yet to receive the bank guarantees back in return.

Poj called the C-bond unfair but, said it was difficult to force the US to cancel the measure.

'The government is the only hope for shrimp farmers and exporters,' he said.

Meanwhile, private Indian companies have raised a case against the US at an American court because they face the same double penalty.

Thai exporters could benefit if the India case is successful.

According to a Customs Department report, the US is the largest market for Thai shrimp, accounting for 53 per cent of exports. The nation's shrimp exports grew by 17.04 per cent year on year to 38,756 tonnes in January and February.

Shrimp exports to the US grew by 25.21 per cent to 20,757 tonnes during the same period.