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US FTAs push Thai garment exporter out of the country

14 Jul '06
2 min read

Thai garment manufacturers are currently on tenter hooks as the US goes about concluding Free Trade Agreements with different countries having apparel and textile manufacturing bases.

Fear of losing out to rivals has prompted them to seek new locales and plants overseas mainly from Vietnam and Cambodia.

With the fluid political situation within the country, and no sight of trade deal with the US, currently, Thai garment exports attract tariff to the tune of 27 percent to that country.

However, an FTA may raise down the duty structure to zero and help Thai garment exporters to offer more attractive prices to the US buyers.

Even the pending Japan-Thailand Economic Partnership Agreement may affect export earnings as it is also considered an important export destination.

Already India, and other Asian countries, particularly Bangladesh, Burma, Pakistan, the Philippines, Cambodia, Indonesia, Malaysia, Sri Lanka and Vietnam have been offering stiff competition to Thai garment exporters.

Assessing this scenario, several Thai garment-makers are scheming their flight to Least Developed Countries like Cambodia and Vietnam which lack in internal raw material resources but have large textile quotas to their credit to the US and the European Union markets.

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