Thai officials take shrimp case to WTO

Thailand is preparing to file a complaint with the World Trade Organisation against the United States over its requirement for bonds levied on Thai shrimp exports.

The government on March 16 directed the Thai ambassador to the WTO to proceed with the lawsuit in Geneva, according to Rachane Potjanasuntorn, the director-general of the Foreign Trade Department.

'Lawyers have been hired to prepare the lawsuit and now they are in the process of asking for more information from Thai exporters,' said Mr Rachane.

Local shrimpers have been dissatisfied with the government's slow response in the case, and recently threatened to rally in Bangkok, already the scene of large daily anti-government protests.

Representatives of various shrimp industry groups on Feb 24 submitted an open letter to caretaker commerce minister Somkid Jatusripitak, asking the government to file suit against the US within 30 days over what they call double taxation.

Mr Rachane said the suit was expected to be filed next month, with the trial process expected to take about one year.

Poj Aramwattananont, president of the Thai Frozen Food Association, said the government had done the right thing to protect Thai interests.

However, he warned it was still uncertain whether Washington would scrap the bond requirement if the WTO ruled in favour of Thailand. The reason was that the bond requirement, as part of US anti-dumping measures, was raised by the private sector, not the government.

Washington imposed anti-dumping penalties in early 2004 against shrimp from Thailand and five other countries, in response to complaints from US shrimpers who claimed that low-cost shrimp from other countries hurt their industry. Thailand maintains that it is unfair to compare the costs of farm-raised shrimp with the higher cost of shrimp caught at sea, mainly in the Gulf of Mexico.

As part of the anti-dumping action, US authorities require a ''continuous bond'', or a 100% bank guarantee, for Thai shrimp.

US importers must post the bond, equal to the value of expected anti-dumping penalties on Thai shrimp based on past shipment volumes. In practice, Thai exporters pay the sum, which is not refundable until the penalties expire next year.

According to an estimate by shrimp exporters, the bond payments are expected to total US$100 million this year. Last year, Thai exporters paid about $50 million.

Thailand's shrimp exports for the first two months of this year totalled 38,762 tonnes, a rise of 17% from the same period last year, with exports to the US market still strong at 20,757 tonnes, up 25.2% despite the penalty duties.

Thanks to the reinstatement of lower tariffs by the European Union, Thai shrimp exports to EU rose by 115.65% to 2,045 tonnes.