Intellectual property protection is one of the Generalized System of Preferences (GSP) requirements. In 2009, Thailand's trade status on the US Priority Watch List (PWL) under the Special 301 statute will likely remain unchanged, thus being considered among the second-most serious cases of intellectual property infringement under US's special 301 law. In 2007, when the US downgraded Thailand's intellectual property infringement rating from inclusion in the less serious Watch List (WL) to the Priority Watch List (PWL), Thai exports were still eligible for GSP privileges in many trade categories.
Although the intellectual property infringement rating did not directly affect GSP privileges in the past, it is possible that the US might use the intellectual property issue to erect trade barriers in order to assist their domestic economy amid the current recession. The reconsideration of GSP privileges this July might see changes, and this could somewhat aggravate our decelerating exports to the US.
Over the last three years, Thai GSP exports to the US dropped continuously, from 22 percent of our trade in 2006 to 17 percent in 2008, due to cuts in GSP privileges by the US in three Thai export categories, including precious metal accessories, televisions and plastic pellets. KASIKORN RESEARCH CENTER (KResearch) is of the view that our US GSP status will remain uncertain, because it is unilateral and non-reciprocal. It is subject to change according to the US annual review criteria. As a result, we might not enjoy long-term benefits from GSP grants.
As for our market expansion in the US, our competitiveness should be enhanced together with developing and improving production efficiency, leading to cost reductions, and product development and innovative design based on the concepts of concern for the environment, plus unique style and design.
Amid weakening demand in the recession-hit US market, lower-priced products seem be to be more attractive among importers and consumers there, so price competitiveness in the US has become tougher. As a result, GSP privileges have become more important for Thai exports to the US. If the US approves our request for GSP renewal on nine export items and the reinstatement of GSP on three exports, our competitiveness in the US may be strengthened. Thailand is now in the process of revising laws related to intellectual property rights, especially in punishment for violators both buyers and entrepreneurs. This would be a boon to our progress in our copyright protection scheme over the long term, explicitly showing our strong efforts to address copyright piracy concerns. As a result, we hope that the US is less likely to use the issue as a prelude for removal of GSP granted to our exports, which would further worsen our ailing exports to the US market.
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