Farmers fret at tariff deal
The Thai negotiating team sent to Washington managed to get a tariff rate of 19% on Thai goods exported to the US, instead of the initial 36%.
Let's not forget that the Thai government in the past promised not to sacrifice the local farm sector.
But apparently, their promises back then were just more hot air, as the deal with the US may affect local swine farmers and corn growers.
The government has agreed to reduce the tariff on US imported products to 0% and may remove non-tariff protective measures, such as a ban on pork products with ractopamine additives.
It also promised to invest more in the US and buy American commercial planes, natural gas, and corn.
Recently, Termsak Boonchuen, president of the Nakhon Sawan Farmer Council and a member of the national maize policy and management committee, warned that an influx of the much cheaper genetically modified corn from the US would affect local farmers.
Thailand would need to purchase 3.5 million tonnes of corn from the US for the local feedstock industry, he said.
Sitthiphan Thankiatphinyo, president of the Swine Raisers Association of Thailand, meanwhile, is urging the government to clarify the matter and provide policy help after learning that the ban on ractopamine-fed pork, in place since 2007, may be lifted to accommodate the US tariff deal.
Ractopamine is a feed additive used in some countries, especially the US, to promote leanness, muscle, and protein in pigs and cattle.
Thailand, along with the European Union, Taiwan, and other markets, has banned the import of ractopamine-fed pork, citing potential negative impact on the health of consumers.
What is worrying is that the government does not have answers for local farmers.
This week, Finance Minister Pichai Chunhavachira was quoted by the media as giving vague promises, such as financial assistance, subsidies, and arranging training courses, to improve the capacity of local farmers.
But the fact is that the government has become tight-lipped about its trade negotiations with Washington.
Past experience already shows that free trade agreements and zero-tariff deals often affect local small-scale farmers the most.
For example, an FTA that the Thai government signed with Beijing in 2003 has decimated swaths of local farmers and producers.
While this particular FTA has helped the export of valuable fruit, the 0% tariff policy has opened the door for the import of cheap vegetables and fruit into the local market.
In terms of the local swine industry, the government has failed to deter illegal pork smuggling, causing substandard products to flood the market for the last few years.
Getting a favourable tariff deal from the US is welcome, but it is far from enough.
The government must help local manufacturers to deal with the impact and make Thai farm products more competitive.
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Bangkok Post
4 hours ago
- Bangkok Post
A difference of opinion
When the moment of truth came -- that Thailand had been slapped with a 19% tariff by the US, down from the originally threatened 36% -- several implications for the government were spelt out by experts, both positive and cautionary. The fact that the government successfully negotiated the tariff rate down to 19% allows it to claim a diplomatic and economic victory. It positions the government as competent in international negotiations and responsive to economic threats, especially after an extended period of vulnerability from the Trump administration's tariffs, according to supporters. Public and business confidence in the government, particularly among exporters and investors, may temporarily improve. The government can exploit this as protecting national economic interests in a fragile post-pandemic and post-border conflict environment, experts said. Government supporters insisted the outcome of the negotiations has enhanced the stature of noted technocrats like Finance Minister Pichai Chunhavajira or government adviser Dr Prommin Lertsuridej as effective economic stewards, and shored up the beleaguered government's image. It has, in turn, helped stabilise an increasingly fragile coalition government under heavy scrutiny for lacking strong economic leadership or a long-term plan. Also, the concessions made to the US -- elimination of import duties on more than 10,000 American products -- may trigger criticism from domestic industries that now face heightened foreign competition. This includes agriculture and small and medium-sized enterprises (SMEs) at risk of being undermined by cheaper US imports. Critics have framed the deal as capitulating to American pressure, portraying it as a win for Washington but a loss for Thailand's long-term competitiveness. The tariff issue also indicates a tilt towards the US at a time when Thailand must perform a careful diplomatic balancing act amid the Thailand-Cambodia border conflict, where regional alliances are under scrutiny. Pro-Beijing elements, or nationalist factions, are questioning the wisdom of relying too heavily on Western markets, according to observers. The tariff deal still requires parliamentary approval, which means the legislative process could revive political tensions if the opposition exploits the deal to question the government's transparency or economic strategy. At the same time, intra-coalition differences could emerge over how the tariff concessions align with broader industrial and agricultural policies. The experts agreed that while the lower US tariff is a strategic, diplomatic and economic relief, it is not without political cost. The government must play its cards right and manage the domestic industrial fallout, sell the deal politically, and prepare for parliamentary scrutiny -- all while navigating geopolitical sensitivities in a shifting regional order. Meanwhile, former finance minister Korn Chatikavanij has warned of long-term risks from the US tariff, urging the government to invest more in sharpening the country's competitive edge. Mr Korn has issued a sobering analysis of the 19% import tariff, which directly impacts Thai exporters. While acknowledging that Thailand avoided harsh penalties with the 36% tariff, he noted the compromise came at a high price and that urgent domestic reforms are needed to prevent the country falling further behind in a hostile global trade environment. In a post titled "What Will 19% Mean?", published on his Facebook page, Mr Korn expressed some relief that Thailand secured a tariff rate comparable to other Asean countries, despite the diplomatic challenges that led up to the outcome. "The 19% came at the cost of Thai people's blood and sweat," Mr Korn wrote. "There had been no indication that Trump saw value in our proposals -- until he seized the opportunity to play the hero in ending the [Thai-Cambodian] standoff. That's why some have called the outcome a 'Peace Dividend'." Notably, Mr Korn pointed out that the US did not distinguish between Thailand and Cambodia in assigning tariff rates, despite Cambodia initially facing a 49% rate. Both now face the same 19%, showing Washington's strategic rather than moral calculus. While Thailand managed to hold its ground diplomatically, Mr Korn stressed that international perceptions remain a concern and that there is more work to be done in communicating Thailand's position to the global community. The former finance minister warned that Thai exporters will inevitably suffer lower profit margins under the new tariff structure. The added costs, compounded by the potential drop in American consumer demand due to rising prices, could dampen Thailand's export performance. He also highlighted the indirect consequences of the US tariffs on global trade dynamics. With China facing growing difficulty rerouting its exports via transshipments to evade tariffs, Thailand may see a surge of cheap Chinese goods flooding into its domestic market, posing an additional hardship for local manufacturers. Mr Korn applauded Mr Pichai for outlining the correct policy direction -- preparing relief measures through low-interest credit packages for affected businesses and pushing for long-term competitiveness enhancements. He also hammered home the importance of transparency, urging the government to disclose the terms of its negotiations with the US under Section 178 of the Constitution, which requires parliamentary oversight of international agreements. "Trump is the clearest winner," Mr Korn concluded. "He has succeeded in extracting US$300–500 billion annually in tariffs from global trade partners. The message is clear: in this era, friendship is irrelevant -- only mutual interests matter." Mr Korn closed his analysis with a warning: Thailand must not rely on diplomatic luck or external protection. The only sustainable path forward is internal development, reform, and innovation. "If we don't adapt," he warned, "we'll only become more disadvantaged." Waiting in the wings? With tensions along the Thai-Cambodian border showing no sign of easing and the prospect of a general election looming, observers now see the possible rise of a new political force. They envisage a fresh conservative party capable of tackling political, economic and security problems while putting forward a prime ministerial candidate who can stand shoulder-to-shoulder with those from existing political parties. Such a candidate need not be a career politician, but must possess an unblemished record, free of any links to Cambodia's leadership. And with many in the conservative camp increasingly dissatisfied with existing conservative parties, speculation is rife that any new party aligning itself with the armed forces could have an advantage at the polls. Stithorn Thananithichot, a political science lecturer at Chulalongkorn University, said a great deal of public support is directed towards the armed forces for its handling of the border conflict with Cambodia. And while such a party and candidate have yet to step up, existing political parties are likely to court the military and position themselves as its allies to capitalise on public sentiment as they prepare for the polls, he noted. While Bhumjaithai appears to be the most trusted option for conservative voters -- as opposed to the ruling Pheu Thai Party -- the party, as well as the United Thai Nation Party (UTN) and the Palang Pracharath Party (PPRP), have fallen short of expectations despite having been in the government for the past two years, he said. He said Bhumjaithai has seen a slight increase in popularity after withdrawing from the coalition government, which suggests that there are still millions of conservative voters up for grabs if the right strategy is in place. "When they see this significant voter base, all conservative parties will scramble for a strong prime ministerial candidate and economic policy, as well as a military reform plan that the public actually wants. But so far, no one has emerged," the analyst said. However, he said that outgoing central bank governor Sethaput Suthiwartnarueput appears to fit the bill. He is widely considered capable, committed to national interests, and did not bow to political pressure to safeguard the central bank's independence and maintain the country's international fiscal credibility. "Even if he is politically inexperienced, I don't think that voters will look at it as a problem. They're all too familiar with smooth-talking politicians with vested interests. The only question is whether Mr Sethaput has any interest in politics," he said. Mr Sethaput's five-year term at the central bank ends on Sept 30, and he will be succeeded by Vitai Ratanakorn, currently president and CEO of the state-owned Government Savings Bank (GSB). Thanaporn Sriyakul, director of the Political and Public Policy Analysis Institute, said a new conservative party will need figures like Mr Sethaput or former central bank governor Veerathai Santiprabhob to win over voters. Both have earned a lot of trust from technocrats and have shown that they have had no vested interests while in the jobs they occupied. This is in stark contrast to some towering figures who pull strings in politics, he said. However, he said if conservative voters feel deeply attached to the military, the chief of the defence forces, Gen Songwit Noonpakdee, who is scheduled to retire at the end of September, could be among their top choices for prime minister. Gen Songwit is regarded as a forward-thinking individual, as illustrated in his handling of Thai-Cambodian tensions, he said. "He's the first and only supreme commander to unify all branches of the armed forces under a strategic plan. In the past, each branch operated separately," he said. Whether the general harbours any political ambitions will only become clear after his retirement, he said. As for the Bhumjaithai Party, which is the most popular among the existing conservative parties, it still has much work to do if it wants to secure substantial support, according to Mr Thanaporn. First and foremost, it will have to come up with a military reform proposal to streamline the armed forces to make them lean, yet effective. However, Bhumjaithai will be competing with the People's Party (PP), which is reportedly devising its own ambitious reform platform, he said. According to the analyst, the PP's military reform plan is said to include trimming excess military spending and restructuring the armed forces to address not only the Cambodian border situation but also other potential flashpoints.
Bangkok Post
10 hours ago
- Bangkok Post
Wipo honours princess with envoy role
The World Intellectual Property Organization (Wipo) has officially invited Her Royal Highness Princess Sirivannavari Nariratana Rajakanya to serve as the Wipo Ambassador for Design and Fashion, having recognised her creative achievements and commitment to promoting intellectual property as a tool for sustainable community and global development. Deputy Commerce Minister Suchart Chomklin announced the honour yesterday, highlighting the princess's dedication to advancing Thai culture and craftsmanship on the international stage. The invitation was extended during a visit by Wipo Director-General Daren Tang, who was welcomed by Mr Suchart, Thailand's Permanent Mission to the World Trade Organisation (WTO), and Wipo representative Pimchanok Pitfield, as well as other ministry officials. HRH Princess Sirivannavari becomes the third Thai royal to receive a prestigious Wipo title. The late King Bhumibol Adulyadej the Great was previously honoured with a Wipo Global Leaders Award, while HRH Princess Maha Chakri Sirindhorn received the Award for Creative Excellence. "This recognition is a source of national pride," said Mr Suchart. "It celebrates HRH Princess Sirivannavari's visionary leadership in continuing the legacy of Her Majesty Queen Sirikit, the Queen Mother, particularly in preserving and promoting Thai textiles globally." He also praised the Princess's initiative, "Pha Thai Sai Hai Sanook" (Wearing Thai Textiles, a Fun Way), which encourages the public to embrace Thai crafts while generating sustainable income for local communities. During the meeting, Mr Suchart and Mr Tang discussed further collaboration on leveraging technology, innovation, and intellectual property to drive economic growth. Topics included Thailand's soft power strategy, investment in artificial intelligence (AI), and the development of data centres. They also explored the potential of the Global Innovation Index (GII) as a tool to enhance the nation's global competitiveness, and considered a pilot project to use intellectual property as collateral for financial funding, aimed at boosting investment and economic value. Mr Tang expressed his appreciation for Thailand's progress in the latest GII rankings, noting the country's rise from 43rd to 41st place.
Bangkok Post
10 hours ago
- Bangkok Post
Thai deal targets growth of domestic chip design
The Thai Embedded Systems Association (TESA) recently signed a memorandum of understanding (MoU) with global chip design software firm Synopsys as it works to build domestic chip design capabilities. The platform aims to enable Thai production of its own chip products, utilising its existing manufacturing industry, supporting advanced research and contributing to the local assembly, testing and packaging sector. The partnership can also cultivate local talent to compete to become a semiconductor hub in Southeast Asia, said Wiroon Sriborrirux, president of TESA. "Thailand imports chips worth hundreds of billions of baht every year, yet we don't design our own chips. This need to change," he said. The MoU represents a step forward in chip design for the nation, said Mr Wiroon. Thailand will develop capabilities to contribute to the global Artificial Intelligence of Things (AIoT) ecosystem as a designer and innovator, not just a consumer, he said. Under the MoU on AIoT chip prototyping and curriculum development, Synopsys will provide electronic design automation tools, technical support, and the necessary resources to help Thailand's ecosystem, particularly university professors and industry partners to achieve the technical results needed for success. This partnership represents a milestone in Thailand's goal to design its own chips, said Mr Wiroon. "We're working to develop a prototype of a 'nation chip' with built-in edge AI capabilities that will be the core technology for high-impact industries in Thailand," he said. TESA expects an outcome from the collaboration by the middle of next year, said Mr Wiroon. Ultimately, the association intends to create a sustainable knowledge transfer model for Thailand, with 50 professionals trained by the end of 2026. Thanaporn Sangpaithoon, vice-president of TESA, said Thailand's electronics industry is dominated by assembly, testing, packaging and manufacturing, with only a few integrated circuit (IC) design companies. "TESA aims to shift the country's focus from low-value-added manufacturing and production to accelerating R&D activities in IC design, and production of intellectual property [IP] patents as well as development of a skilled IC design workforce," said Mr Thanaporn. In the long term, the group wants Thailand to build capability in design and manufacturing of its own electronics products for export, rather than remaining a production base for factories that can easily be relocated elsewhere, he said. The MoU is meant to facilitate AIoT prototyping and curriculum development by leveraging Synopsys tools to create application-specific IC prototypes, extending this design collaboration to TESA's university partners, and fostering the growth of new startups that will adopt Synopsys' electronic design automation technologies and IP. Seven university partners have signed user licence agreements with Synopsys through TESA, gaining access to tools for chip prototyping and developing curricula focused on IC design. The Synopsys-TESA partnership is focusing first on prototyping 32-bit RISC-V chips with a tiny and efficient neural processing unit. These chips are uniquely suitable for AIoT, featuring an open and modular architecture with low power consumption and high efficiency. Adrian Ng, executive sales director for Southeast Asia, Pakistan and Bangladesh at Synopsys, said the US-China trade war and tariffs are creating an unfortunate but significant opportunity for Southeast Asia as more companies seek to move operations to Asia. The semiconductor business is critical for national security and countries are heavily investing in it, he said. The global semiconductor market is projected for rapid growth, reaching US$1 trillion by 2030, rising from roughly $500 billion now, said Mr Ng. However, the industry faces significant challenges, particularly demand for talent, with huge shortages of engineers in the US, South Korea, Japan, Taiwan and India. He said Thailand has a strong base in assembly and testing, but it must move upstream. Building a robust IC design ecosystem requires a clear government industrial policy, R&D incentives, and open investment and talent development, said Mr Ng. Synopsys hopes this AIoT project will be a "shining star" for Thailand's silicon capabilities, he said. Vietnam, Malaysia and the Philippines are developing their semiconductor sectors, and Thailand needs to "ride on this wave", said Mr Ng.
