WT/TPR/S/9 Trade Policy Review
Page 32
IV. TRADE POLICIES AND PRACTICES BYMEASURE
(1) Overview
1. Since theprevious Trade Policy Review in1991, Thailand hasmade much progress inthe
creation ofamoreneutral incentive structure, yetasubstantial degree ofnon-transparency stillremains;
examples include thelackofapublished tariff schedule since 1992, andtheunavailability ofdetailed
information concerning theusage oftariff concessions andinvestment incentives.
2. Thailand 'sapplied import tariffs in1995 range from zeroto100percent(notincluding the
effects ofspecific tariffs), withasimple average of23.1percent. Tariff peaks arefound inknitted
goods, footwear, rubber products andmotor vehicles. Thisdoesnotinclude theextensive useoftariff
concessions inconnection withinvestment incentive schemes. Tariff reforms commencing inJanuary
1995 willreduce theaverage applied tariff ratefrom theprevious levelofabout 30percentin1994
to17percentby1997, andthenumber oftariff rateswillbecutsharply from 39to6(atzero, 1,
5,10,20,and30percent).
3. Toalarge extent, Uruguay Round commitments arealready reflected inapplied rates.
Tariffication applies toimport barriers in23agricultural product groups, including rice,silk,sugar
andmilkproducts, withthespecial safeguard requirement retained for53tarifflines. Among industrial
(andfisheries) products, theaverage Uruguay Round tariff reduction wasabout 28percent,covering
more than3,000 items atthe9-digit HSlevel. Fortextiles andclothing, aswellasforagricultural
products, thetariff reductions areoveraten-year period. AsofSeptember 1995, arrangements for
tariffication of11ofthe23product groups concerned hadbeenimplemented andnotified totheWTO,
withtheobjective ofcompleting theremainder bytheendof1995.
4. TheGovernment 'sBoard ofInvestment (BOI) hasputintoeffect certain changes intemporary
tariff-related concessions andexemptions linked tospecified newinvestments. Forprojects located
inthemostremote areas, theleveloftemporary dutyexemption onmachinery imports wasincreased,
andimport duties havebeenreduced formaterials usedinproduction fordomestic sales. Since 1993,
themostimportant theme ofgovernment investment promotion policies isregional development; export
promotion hasbeende-emphasized.
5. Theaverage ASEAN FreeTrade Area(AFTA) preferential rateextended byThailand isabout
19percentin1995; foranumber ofproduct categories, Thailand 'sAFTA ratesappear tobeabove
currently applied m.f.n. rates. Asaresult oftheASEAN Agreement toreduce theAFTA transition
period from15totenyears, Thailand 'stariffs onmanufactures above 20percentwillbereduced to
amaximum of5percentbyJanuary 2003.
6. In1992Thailand consolidated itssystem ofbusiness taxesintoageneral VATrateof7percent
ongoods andservices. Thailand alsoimposes excise taxesonanumber ofproducts. Onmotor vehicles,
excise taxes range between 27and45percent, depending onvehicle type; exemptions aregranted
topassenger carsandpick-up trucks thatsatisfy local-content provisions. Surcharges orspecial duties
continue tobeimposed byThailand onimports offishmeal, wheat andmeslin flour, cornforanimal
feedandsheets andplates ofironandsteel.
7. Thescope ofimport licensing inThailand hasdecreased significantly. Protection ofdomestic
industry remains themostcommon justification, followed bytheprotection ofpublic health andmorals.
Anumber ofmajor products, suchasliquified petroleum gas(LPG), kerosene, motorcycles andcertainThailand WT/TPR/S/9
Page 33
buses,aresubjecttoconditionalimportprohibitions.Thailand'sonlyremainingimportquotaisimposed
ongarlic, andisscheduled tobeconverted toatariff quota in1995.
8. Most local-content requirements were abolished inApril 1993, except those concerning
manufactured dairy products, engines andmotorcycle assembly. Asubstantial number ofpreviously
approved projects, however, areobligated tocontinue observing local-content requirements forafixed
timeperiod.
9. TheGovernment isprivatizing orliquidating anumber ofits22State-trading organizations.
Under Thailand 'splans foradministering agricultural product tariffication, import allocations fora
number ofitems aregranted onlytoState-trading organizations; other Statefirms enjoy a10percent
price advantage forgovernment procurement.
10. According totheauthorities, Thaifoodstandards andregulations aremostly inconformity
withCODEX andother international standards. There iscurrently nomutual recognition between
Thailand anditstrading partners concerning theacceptance offoreign testresults andtesting procedures;
mutualconsultationsareplanned.AsofApril1995,1,446Thaiindustrialstandardshavebeenpublished,
ofwhich 41arecompulsory technical regulations.
11. GovernmentprocurementinThailandisusuallythroughtendersissuedbytheMinistryconcerned;
there isnocentralized purchasing agency, andinformation isnotavailable ontheamount ofpattern
ofgovernment procurement. Thaiproducts andservices, except construction, aregiven a10percent
preference ingovernment procurement, provided theymeet therequirements oftheThaiIndustrial
Standards Institute; otherwise, themargin ofpreference is3percent.
12. Anti-dumping action wastaken in1994against imports ofhydrogen peroxide fromIndia, with
provisional andfinalduties of30percentimposed inJuneandNovember 1994, respectively.
13. Fortapiocaproducts(i.e.cassava),thepreviousvoluntaryexportrestraint(VER)waseliminated
following tariffication ofimports bytheEuropean Union. Export restraint arrangements ontextile
andclothing exports which were partofvarious bilateral arrangements negotiated under theformer
MFA havebeen"rolled over" asthestarting point fortheten-year transitional phase-out programme.
Quota andmonopoly export arrangements forsugar were cancelled in1994.
14. TheExport Import BankofThailand (EXIM Bank) wasestablished inFebruary 1994, assuming
operationoftheexportrefinancingfacilitiesformerlyadministeredbytheBankofThailand.ThePacking
Credit Scheme, continues tobethemainexport refinancing facility forsupplying export credits through
commercial banks.
15. Price controls areineffect forthree items asofApril 1995: pork, refined sugar andcooking
gas.Forcertain major agricultural crops, pricesupports havebeenmaintained through leadpurchases
bytheGovernment, e.g.ricein1989-90. TheCentral Committee onPrice-Fixing andAnti-Monopoly
actsasThailand 'scompetition authority, andhasthepower toreferviolations forcriminal prosecution.
16. Thailand hasaccepted theUruguay Round Agreement onTrade-Related Aspects ofIntellectual
Property Rights (TRIPS), andintends toimplement theTRIPS Agreement within thetransition period
permitted developing countries. InSeptember 1995 theBilltosetupanintellectual property and
international trade court wasresubmitted toParliament.WT/TPR/S/9 Trade Policy Review
Page 34
(2) Measures Directly Affecting Imports
(i) Registration andnotification requirements
17. Allimporters inThailand must beregistered withtheMinister ofCommerce.
(ii) Tariffs
(a) General features
18. Thailand 'stariff structure isbased onasystem ofstatutory andapplied rates. Changes to
statutoryrates,includingthosetoimplementUruguayRoundcommitments,requirelegislativeapproval;
modificationstoappliedtariffratesmaybemadebytheMinisterofFinance,subjecttoCabinetapproval,
under thelegislative authority oftheTariff Decree of1987.1Thailand adopted theHarmonized System
(HS)in1991, andthere arecurrently about 6,450 applied tariff linesatthe8-digit level. Themost
recently published tariff isdated May1992.
19. In1995applied tariffs forimports intoThailand range fromzeroto100percent(notincluding
theeffects ofspecific tariffs), withasimple average of23.1percent(Chart V.1andTable AV.3).2
Thisdoesnotinclude theextensive useoftariff concessions inconnection withinvestment incentive
schemes. At38.6percent, thetariff average foragricultural rawmaterials (asdefined onanISIC
basis) issignificantly higher thanthatformanufacturing (22.6 percent) ormining andquarrying
(8.2percent).3Tariffs accounted for19.3percentofgovernment revenues infiscal year(FY)1994,
adecline of0.3percentage points fromFY1993.4Considering thattheGovernment hasrecently been
running budget surpluses, therevenue aspect oftariffliberalization nowappears tobefarlesssensitive
thaninprevious years.
20. Applied tariff peaks atthe4-digit ISIClevel(notincluding theeffects ofspecific tariffs) are
currently found inknitted goods (100percent), footwear (100percent), rubber products (100percent)
andmotor vehicles (80percent).5Tariff escalation isnegative from firsttointermediate stage
processing, withaverage ratesfalling from about 27to20percent, butrising again to24percent
forfinalstage processing; escalation issteeply positive forsuchsectors astextiles, paper products,
rubber products, basic ironandsteelproducts, non-ferrous metals andfabricated metal products
(Chapter V(4)).
1GATT(1991),TradePolicyReview-Thailand,p.74.Proceduresforchangingappliedtariffratesaredetailed
inChapter II(2)(i); Thailand 'spreferential tariffs arediscussed inSection (g)below.
2Advalorem equivalents fortheestimated 161specific rates were notmade available bytheGovernment,
andtherefore have notbeen included inthecalculations.
3GATT(1991)notedthattheaverageimport-weightedappliedtariff(i.e.importdutiescollectedasapercentage
oftotal import value) in1990 was11.4 percent, compared toalowof9.7percentin1982.
4USTR (1995, 1994), pp.301and263. For1990, thefigure wasabout 24percent. Thefiscal yearruns
from October toSeptember.
5GATT (1991) identified applied tariff peaks infoodstuffs (231 percent), motor vehicles (121 percent),
textiles andclothing (113percent), beverages andspirits (108 percent) andleather andfurskins (97percent),
indicating thatrates have since fallen duetocontinuing tariff liberalization.Thailand WT/TPR/S/9
Page 35
21. Tariff reforms announced inDecember 1994, withimplementation commencing inJanuary
1995 (Table IV.1) willreduce theaverage applied tariff rate,according totheauthorities, from the
previous levelofabout 30percentin1994 to17percentby1997. Thenumber oftariff rateswill
becutsharply from39to6(atzero, 1,5,10,20,and30percent).6Thetotalnumber oftariff lines
involved intheDecember 1994 cutsisabout 4,000. Until January 1995, advalorem applied rates
rangedfrom0-100percent,togetherwithsubstantialuseofspecificexceptionsanddifferentialtreatment.
22. AspartofThailand 'soverall efforts topromote industrial andregional development, tariff
ratesarebeing restructured, asofJanuary 1995, under the"value-added escalation principle" asfollows:
- zerofortariff-exempt products suchasmedical equipment andfertilizer;
- 1percentforrawmaterials, electronic components andvehicles forinternational
transportation;
- 5percentforprimary products andcapital goods;
- 10percentforintermediate products;
- 20percentforfinalproducts; and
- 30percentforproducts requiring "special protection".7
6AsofJanuary 1995, 30rates, ranging from zeroto100percent, were inplace.
7Thiscategoryappliestolocallyproducedimport-competingproductswhichareregardedasrequiringcontinued
protection, including fabrics, carpets, clothes, blankets, handbags, shoes, headgear, wigs, television sets,
refrigerators andairconditioners.WT/TPR/S/9 Trade Policy Review
Page 36
Table IV.1
Reforms ofapplied m.f.n. tariffs inThailand, 1990-94
Product group (byH.S. chapter)Tariff (percent)Date
implementedPrevious Post-reform
Machinery (parts ofChapters 84-85) 20 5 September 1990
Passenger carsandpick-ups (partofChapter 87) 100-200 42,68.5 July1991 and
January 1992
Computers andparts thereof 20 5 July1991
Chemicals (parts ofChapters 28-38) 0-60 0-20 January 1993
Ores(parts ofChapter 26) 5 1 January 1993
Iron, steelandarticles thereof (parts ofChapters 72-73) 2.5-60 1-20 January 1993
Non-ferrous metals andarticles thereof except ironandsteel
(parts ofChapters 74-83)0-60 1-30 January 1994
Measuring, checking, research andmedical instruments (partofChapter 90) 0-40 0-5 January 1994
Electronic components 35 1 March 1994
Electrical andelectronic products 5-60 5-30 March 1994
Optical, cinematographic instruments 30-40 5-20 March 1994
Mineral fuelandoil,petrochemicals, plastics andrubber
(Chapters 27,39,40andpartof29)0-60 0-30 January 1995/97a
Textiles (Chapters 50-53) 5-60 1-30 January 1995/97a
Leather andarticles ofleather, handbags, headgear (Chapters 41-43 and54-67) 0-100 0-30 January 1995/97a
Wood, pulp, paper andprinted books (Chapters 44-49) 0-60 0-30 January 1995/97a
Glass, ceramic, articles ofstone, plaster andjewelry (Chapters 25,68-71) 0-60 0-30 January 1995/97a
Prepared foodstuffs, beverages (except spirits andtobacco) (Chapters 16-24) 0-65 0-30 January 1995/97a
a Effective January 1995, withexceptions; fullimplementation asofJanuary 1997.
Source: Dataprovided bytheauthorities.
Uruguay Round effects
23. Based onelectronic datasupplied fortheUruguay Round negotiations (which usedapplied
1988 tariffs inplace oftheapproximately 30percentofindustrial tariff linesremaining unbound),
Thailand 'sfinalUruguay Round simple tariff average willbenearly 29percent(including theeffects
oftariffication for23tarifflines), compared toaninitial negotiating levelofabout 40percent. Nearly
60percentoftarifflineswillbeinthe25-30 percentrange. Onlyabout 24outof95totalcategories
atthe4-digit ISIClevelwillevidently haveasimple average below current applied levels (Table AV.3),
indicating that,formany sectors, Uruguay Round commitments arealready reflected inapplied rates.8
Fortextiles andclothing, aswellasforagricultural products, thetariff reductions areoveraten-year
period.
8Statistics maynotbedirectly comparable, however, between applied, preferential andpost-Uruguay Round
tariffs, duetosuch factors asvariations inthenumber oftariff lines included ineach tariff type.Thailand WT/TPR/S/9
Page 37
24. Atthe4-digit ISIClevel, finalUruguay Round tariffpeaks occur foragricultural andlivestock
products (218percent), dairy products (216percent), textile spinning, weaving, etc.(226percent),
oilsandfats(146percent), fruitandvegetable canning (142percent), footwear (100percent), fur
dressing (100percent)andmotor vehicles (100percent). Withtheexception ofthelastthree items,
thesetariffpeaks apply toagricultural items subject totariffication (Chapter V(2)(a)).9Simple average
tariffs arehighest forsugar products (79.2 percent), liquor (60percent), tobacco (60percent), wooden
cases (51percent), motor vehicles (50.9 percent) andmotorcycles, etc.(45.9 percent).
(b) Details oftariff changes
25. Thetariff reform announced inDecember 1994 (which ispartofalarge-scale reform of
Thailand 'stariffstructure dating backto1990) willresult indeepcutsbetween 1995and1997inapplied
duties forcoal(25percentto1percent), certain textiles andgarments (5-60 percentto1-30percent),
shoes, processed food(65percentto30percent)andother goods (Table IV.1). Industries expected
tobemostaffected areglass, ceramics, finished plastic products andtextiles.10Motor vehicles, where
applied 1995 tariffs average about 38percentwithapeakof80percent,arenotably excluded from
thetariff liberalization.11
26. Tariff ratesforallitems included intheDecember 1994 reforms areeffective asofJanuary
1995, withtheexception ofcertain products regarded bytheGovernment asunable tocompete with
imports, including petrochemicals, textiles, furniture, toys, leather products andclocks. Forthese
products, ratesarereduced intwophases: the50percentreduction which occurred inJanuary 1995
inthedifference between thestarting rateandthefinaldesignated tariff level, followed byafurther
reduction inJanuary 1997 tothefinaltariff level.
Uruguay Round effects
27. Inagriculture, tariffs willbecutbyanaverage of24percentfrominitial offerratesasaresult
oftheUruguay Round. Tariffication applies to23product groups, including rice,silk,sugar andmilk
products,withthespecialsafeguardrequirementreservedfor53linesatthe6-digitHSlevel(TableIV.2
andChapter V(2)(a)).12Thailand 'sUruguay Round tariffreductions aregenerally reflected incurrent
applied rates; exceptions include vegetables, fruit, processed meatproducts andcanned foods, where
significant further tariff reductions willbeimplemented (Table AV.3).
9Forthepurpose ofnegotiation, agriculture wasgenerally defined astheproducts inHSChapters 1to24,
withtheexclusion ofmost fisheries products (Chapter 3,05.09, 15.04, 16.03, 16.04, 16.05 and2301.20).
Textile items counted as"agricultural" under theUruguay Round definition include rawandcombed cotton,
rawsilkandwool.
10Asian Wall Street Journal (1995), 29December.
11According totheauthorities, reforms since 1990 cover allproducts except primary agricultural products,
equivalent to91percentoftotaltariff lines. Initial stages ofthetariff reform programme were reported inthe
previous Secretariat Report (GATT (1991), p.84).
12GATT (1994), Verification ofDraft Final Schedules ofConcessions, 8March. Domestic support levels
willdrop onlymoderately, from Baht 22.1 billion toBaht 20.3 billion. Nocommitments have been made in
reducing export subsidies (Chapter V(2)(a)).WT/TPR/S/9 Trade Policy Review
Page 38
Table IV.2
Minimum andcurrent access commitments byThailand under theUruguay Round, 1995-2004
(Tonnes, percent)
Tariff No. DescriptionTariff quota
quantityIn-quota
tariff
rate
(%)Initial
bound
rate
1995
(%)Final
bound
rate
2004
(%)Initial
(tonne)Final
(tonne)
Minimum access commitments
0813.40 Longans, dried 5 8 30 59 53
1203.00.0005 Copra 694 1,157 20 40 36
Current access commitments
0401
(2202.90)Milk andcream, notconcentrated, nor
containing added sugar orother matters
(including flavoured milk)2,286 2,400 20 46
(93)41
(84)
0402.10.0007 Milk andcream, concentrated orcontaining
added sugar ortheirsweetening matter, in
powder, granules orother solid forms, orafat
content, byweight, notexceeding 1.5percent.45,000 55,000 20 240 216
0701 Potatoes, fresh orchilled 288 302 27 139 125
0703.10.005
0712.20.0104
0712.20.0200
0712.90.0304Onions andshallots, fresh, chilled, dried, whole,
cut,sliced, broken orinpowder, butnotfurther
prepared, mixed348 365 27 158 142
0703.20.0007
0712.90.0115
0712.90.0128Garlic, fresh orchilled, whether ornotin
powder62 65 27 63 57
0801.10.0106
0801.10.0207Coconut, fresh ordried, whether ornotchilled
orpeeled, including desicated2,312 2,427 20 60 54
0901 Coffee, whether ornotroasted ordecafinated;
coffee husks andskins; coffee substitutes
containing anyportion ofcoffee5 5.25 30 100 90
0902 Tea 596 625 30 100 90
0904.11.0003 Pepper, dried, whether ornotcrushed orground 43 45 27 57 51
1005.90 Maize, forseedandother 52,096 54,700 20 81 73
1006 Rice(including paddy, broken) 237,863 249,757 30 58 52
1201.00.1000
1201.00.9001Soybeans, edible andinedible, whether ornot
broken10,402 10,922 20 89 80
1209.91.0106 Onion seeds 3 3.15 30 242 218
1507.10.0001
1507.90.0006Soybean oilanditsfraction, whether ornot
refined, butnotchemically modified2,173 2,281 20 162 146
1511
1513.21.0004
1513.29.0007Palm oilanditsfractions, whether ornot
refined, butnotchemically modified4,629 4,860 20 159 143
1513.11.0008
1513.19.0005Coconut oilanditsfractions, whether ornot
refined, butnotchemically modified382 401 20 58 52
1701 Cane orbeetsugar andchemically puresucrose
insolid form13,105 13,760 65 104 94
2101.10 Instant coffee andother extracts, essences and
concentrated, ofcoffee, andpreparations witha
basis ofthese extracts, essences orconcentrates
orwithabasis ofcoffee128 134 40 55 49
2304.00.0008 Soybean cake 219,580 230,559 20 148 133
2401 Unmanufactured tobacco; tobacco leaves 6,129 6,435 60 80 72
5002.00.0003 Rawsilk 460 483 30 257 226
Source: Dataprovided bytheauthorities.Thailand WT/TPR/S/9
Page 39
28. Among industrial (andfisheries) products, thetrade-weighted tariff average willfallfroman
initial negotiating levelof37.3percentto28percent.13Theaverage tariff reduction agreed toby
Thailand intheUruguay Round wasintheorder of28percent,somewhat below theUruguay Round
target levelof33percent,covering more than3,000 items atthe9-digit HSlevel. Ingeneral, applied
rates in1995 arealready atlevels equal to,orlower than, Thailand 'sUruguay Round tariff
commitments.14Fisheries products, including canned foods, aretheimportant exception, withlarge
tariff reductions scheduled (Table AV.3).
(c) Specific andalternate tariffs
29. Regarding 1995applied tariffs, specific ratesareapplied toanestimated 161lines, 2.5percent
oftotaltariff lines, concentrated most heavily ingrains, edible oils,sugar, petroleum products and
ironandsteel. Afurther 1,845 tariff linesaresubject toalternative tariffs, i.e.thehigher ofagiven
advalorem andaspecific rate,equivalent tonearly 29percentoftotaltariff lines.15Categories at
the3-digit ISIC level withthehighest percentages ofalternative rates aretobacco (100percent),
beverages (89percent), plastics (87percent), paper products (68percent) andironandsteel
(68percent).
Uruguay Round effects
30. Thailand 'sschedule oftariff concessions under theUruguay Round Agreement states thatfor
items subject tobothanadvalorem andaspecific rate(intheSchedule only), theamount ofcustoms
dutycollected willnotexceed theamount which would havebeenreceived ifonlytheadvalorem rate
were imposed.
(d) Tariff quotas
31. Thailand doesnotimpose anytariff quotas other thanthose forthe23agricultural products
subject totariffication under theUruguay Round Agreement onAgriculture.
(e) Tariff concessions andtariff exemptions
32. Aspartofthechanged emphasis inThailand 'sinvestment policies, moving in1993fromexport
promotion toeconomic decentralization (Chapter IV(4)(i)), theBoard ofInvestment (BOI) hasput
intoeffect certain changes intariff-related concessions andexemptions.16Forprojects located inthe
Zone3geographic region, i.e.themostremote areas, thelevelofdutyexemption onmachinery imports
13GATT (1994), Verification ofDraft Final Schedules ofConcessions, p.70.
14Asnoted above, exact comparisons aredifficult duetodifferences inthenumber oftariff lines listed by
theGovernment, aswellastheuseof1988 applied tariffs inplace ofunbound tariff lines inindustry.
15The1991 Secretariat Report noted thatalternative tariffs accounted forabout 20percentoftotaltariff
linesatthe7-digit HSlevel, concentrated inagriculture; specific rates were applied toabout 3percentoftariff
lines.
16Thegranting oftariff concessions isbased onthecondition thatproducts ofsimilar quality donotoriginate,
orareproduced orassembled, inThailand insufficient quantity tobeusedintheactivity receiving concessions
(items ineligible forconcessions arelisted inTable AIV.10).WT/TPR/S/9 Trade Policy Review
Page 40
wasincreased from 50to100percent, anda75percentreduction (forfiveyears from thestartof
operations) isnowallowed onimport duties forrawandessential materials usedinproduction for
domestic sales; previous to1993, according totheauthorities, reductions weregranted onacase-by-case
basis, suchastooffset dumping ofimports andtotemporarily solve imbalances oftariff structures.17
33. BOI-related tariff concessions andexemptions thatremain unchanged relative totheprevious
ThaiTrade Policy Review concern reduced duties formachinery imported intoZones 1and2,aswell
asdutyexemptions forimported rawandessential materials usedinthemanufacture ofexports; these
aredescribed inTable AIV.1 andChapter IV(3)(xii). Alsounchanged isthegovernment guarantee
nottogrant dutyconcessions toproducts competing withthose produced byfirms receiving investment
incentives (Chapter III(2)).
34. Forfirms unable totakeadvantage ofBOIconcessions (which mayhaveexpired, forexample),
certain tariff dutyconcessions areavailable (Chapter IV(4)(i)). Inaddition, rawmaterials maybe
imported intoabonded warehouse without thepayment ofimport (orexport) tariffs when thematerials
areusedasaninput inproducts destined forexport orarethemselves re-exported; theobjective is
tofacilitate customs procedures forproducers.
35. Estimatedrevenuelossesfromexemptionsandreductionsofimporttariffsonimportedmachinery
andrawmaterials were Baht44.4billion in1992, Baht43.4billion andBaht59billion in1994.18
Accordingtotheauthorities,detailedinformationisnotavailableonthetotalnumberoftariffconcessions
andexemptions currently ineffect, norontheircoverage inproduct terms.
(f) Tariff bindings
36. Inagriculture, asdefined fortheUruguay Round negotiations19,theshare oftariff bindings
byThailand hasrisen to98percentfrom about 5percent, previously. Exceptions include certain
liveanimals, animal fatsandcoral. Among industrial products, thebinding levelincreased from 1
to68percent,covering 70percentofimports.20Industrial sectors atthe3-digit ISIClevelwiththe
lowest levels oftariff bindings arerefined petroleum products (8percent), transport equipment
(27percent), rubber products (30percent), petroleum andcoalproducts (31percent), ironandsteel
(34percent) andfabricated metal products (35percent). According totheauthorities, "Thailand 's
offer isacceptable, appropriate andsuitable tothebalance ofinterests ofthenegotiating parties".21
17Asdefined bytheBOIforinvestment purposes, Zone 1ismade upofBangkok andfiveadjacent provinces;
Zone 2ofthetenprovinces adjacent toZone 1;andZone 3oftheremaining 57provinces plustheLaem Chabang
industrial estate. Zone 3isalsocalled theInvestment Promotion Zone.
18WTO document G/SCM/N/3/THA, 10July1995.
19Seefootnote 9above fortheUruguay Round definition.
20GATT (1994), Verification ofDraft Final Schedules ofConcessions, 8March.
21Rates bound under theUruguay Round were incorporated intoapplied tariff rates, under aMarch 1995
Finance Ministry notification, retrospectively asofJanuary 1995. Theauthorities alsostatethatsome flexibility
insetting tariffs isneeded bytheGovernment, duetotheir current restructuring efforts.Thailand WT/TPR/S/9
Page 41
Asnoted above, initial bindings inagriculture aregenerally atapplied rates; inindustry, bound levels
aresomewhat above currently applied levels.
(g) Regional andbilateral trade
37. AttheSeptember 1994Association ofSoutheast Asian Nations (ASEAN) Ministerial Meeting,
anagreement wasreached toreduce thetransition period fortheASEAN Free-Trade Area(AFTA),
asbased ontheCommon Effective Preferential Tariff (CEPT), from 15totenyears (i.e.from2008
to2003).22Asaresult, tariffs onmanufactures above 20percentwillbereduced tothislevelbyJanuary
1998, andtoamaximum of5percentbyJanuary 2003.23Tariffs below 20percentwillfalltoa
maximumof5percentbyJanuary1998.Allagriculturalgoods(includingunprocessed)aretoeventually
beincluded inAFTA. Thailand willimplement therevised CEPT scheme asofJanuary 1996.
38. Theaverage AFTA preferential rateextended byThailand wasabout 19percentin1995,
compared tothem.f.n. average ofnearly 23percent; foranumber of3and4-digit ISICcategories,
AFTA ratesareabove currently applied m.f.n. rates(Table AV.3).24According totheauthorities,
thehigher levelofcertain AFTA preferential ratesisduetothefactthattheAFTA tariff reduction
schedule hadbeenapproved before thecompletion ofThailand 'stariff restructuring. Thailand grants
preferences on4,513 tariff linesattheHS7-digit level.
39. Thailand avails itself ofArticle 2oftheCEPT totemporarily exclude 183items from the
scheme.25Vegetable oils,electrical equipment, machinery andtransport equipment arethemainitems
concerned, with motor vehicles andparts accounting forover two-thirds oftotal exclusions
(Table AIV.2). Thailand 'sschedule (byproduct) forremoving thetemporary exclusions wastobe
finalized attheSeptember 1995 meeting oftheASEAN Economic Ministers. Todate, Thailand has
notmade useoftheEmergency Measures provision under Article 6oftheCEPT Scheme.
40. InNovember 1994 Asia-Pacific Economic Cooperation (APEC) members announced their
commitment toestablish freetradeandinvestment among themselves, bytheyear2010fordeveloped
countries and2020 fordeveloping nations. Todate, fewconcrete details haveemerged regarding
implementation; significant initial stepsareexpected tobetaken attheNovember 1995summit meeting
inOsaka, Japan (Chapter II(5)(iv)).
22In1992 ASEAN established theAFTA, with theCEPT asthemain mechanism forimplementation.
Originally, theCEPT, which didnotapply tounprocessed agricultural goods, wastobeimplemented within
15years, beginning from 1993.
23ForThailand, 34outof82manufacturing categories atthe4-digit ISIClevel have1995 AFTA ratesabove
20percent(Table AV.3).
24Inaddition, tariff escalation isquite highforsuch sectors astextiles, wood andwood products, paper
products, basic ironandsteel products andfabricated metal products.
25Products aretobeeliminated from theexclusion listinfiveequal annual instalments between January 1996
andJanuary 2000.WT/TPR/S/9 Trade Policy Review
Page 42
(h) Generalized System ofTrade Preferences (GSTP)
41. Under theGeneralized System ofTrade Preferences (GSTP), Thailand provides preferential
margins of10to20percenton11product items tomembers oftheGSTP Agreement (Table IV.3).
Thailand alsoprovides preferential rateson20product items imported from Laos (Table AIV.3).
Table IV.3
GSTP trade preferences provided byThailand
Tariff
No.DescriptionMargin of
preference
(%)Tariff
No.DescriptionMargin of
preference
(%)
2208.40 Rum andtafia 10 7606.11 Aluminium plates 10
4011.101 Radial tyres 10 7606.12 Aluminium plates 10
4011.109 Other tyres 10 7606.91 Aluminium plates 10
5106.10 Yarn ofcarded wool 20 7606.92 Aluminium plates 10
5106.20 Yarn ofcarded wool 20 8413.20 Pumps, etc.forliquids 10
5208.21 Plain weave cotton fabrics 10 8413.40 Pumps, etc.forliquids 10
5208.22 Plain weave cotton fabrics 10 8413.50 Pumps, etc.forliquids 10
5208.31 Plain weave cotton fabrics 10 8501.61 Electric motors andgenerators 10
5208.32 Plain weave cotton fabrics 10 8501.62 Electric motors andgenerators 10
5209.21 Plain weave cotton fabrics 10 8501.63 Electric motors andgenerators 10
5209.31 Plain weave cotton fabrics 10 8501.64 Electric motors andgenerators 10
7303.00 Tubes, pipes, etc.ofcastiron 10
Source: Dataprovided bytheauthorities.
(iii) Rules oforigin
42. Acertificate oforigin isnotgenerally required forimports intoThailand, except forimports
under ASEAN preferences orforitems covered byinternational commodity agreements. ASEAN
member countries haveagreed that"substantial transformation" maybeusedasanadditional criteria
indetermining product origin forASEAN textiles andtextile products.26Previous regulations stated
thatproducts wereregarded tobeofASEAN origin ifatleast40percentoriginated fromoneormore
ASEAN member States.
43. Toensure thatThailand 'srulesoforigin arewithin theframework established under theWTO,
aWorking Group onRules ofOrigin inThailand wasestablished inMay1995 under theauthority
oftheMinistry ofFinance.
(iv) Preshipment inspection
44. TheThaiGovernmentdoesnotrequirepreshipmentinspection.However,preshipmentinspection
could berequired bytheprivate sector.
26Subject toconfirmation byIndonesia andthePhilippines byend-June 1995.Thailand WT/TPR/S/9
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(v) Customs valuation andclearance
45. Customs valuation inThailand isgenerally based onthetransaction value ofimported
merchandise. Inabout 10percentofcases, where thedeclared transaction value isregarded tobe
inadequate, a"check price" system isused.27According toinformation provided bytheauthorities,
thecheck price system istypically usedfordesignated products (andoccasionally forimports from
designated countries); criteria foruseofthecheck price system arebased oninternal directives from
theDirector-General ofCustoms. When thedeclared value isfound tobelower thanthecheck price,
thelatter willbeapplied.
46. According totheauthorities, customs clearance generally requires nomore thanoneday,
unchanged from thatreported inthe1991 Secretariat Report. Clearance times areexpected tobe
accelerated following theplanned implementation oftheUNCTAD ASYCUDA system for
computerization ofcustoms procedures. TheCustoms Department isalsomaking efforts toprovide
additional customs clearance points; "onestop" customs service isalready provided atmostcustoms
clearance points. InDecember 1994 theGovernment alsobegan applying theA.T.A. Carnet System
forusewhen goods aretemporarily imported onaduty-free basis (e.g.forexhibitions).
47. In1994theCustomsDepartmentoftheMinistryofFinanceestablishedacommitteetodetermine
howtoimplement theprovisions oftheUruguay Round Agreement onCustoms Valuation.28Legislation
required tobechanged includes theCustoms Lawof1926 andtheCustoms Tariff Decree of1987.
Under theUruguay Round Agreement onCustoms Valuation, Thailand andother developing countries
areallowed athree-year phasing-in period fromthestartoftheAgreement toconform withtheinitial
"statement ofprinciples" phase, andfiveyears forfullconformity.
(vi) Import surcharges andspecial duties
48. Surcharges orspecial duties continue tobeimposed byThailand onfishmeal, wheat andmeslin
flour, cornforanimal feedandsheets andplates ofironandsteel; thestated objective forimposing
thesurcharges isthemaintenance ofprice levels fordomestic producers.29Fornon-m.f.n. imports,
additional surcharges areimposed (Table IV.4). In1992Thailand removed import surcharges onmotor
vehicles, which hadranged from 20to50percent, ostensibly aspartofliberalization measures
concerning theindustry (Chapter V(4)(xiii)).
49. TheBoard ofInvestment (BOI) hasthepower toimpose import surcharges, under Section 49
oftheInvestment Promotion Act(1977), inorder toprotect industries receiving investment incentives
against alleged dumping oraninappropriate tariff structure (e.g. when tariffs onrawmaterials are
higher thanthose onfinished products). Surcharges arenottoexceed 50percentoftheimport price
ofthegoods concerned, andareinitially limited toaone-year period withthepossibility ofadditional
renewals. While actively usedinthe1970s andearly1980s, subsequent useofBOI-imposed surcharges
declined sharply; thelastremaining surcharge, imposed in1991 onunwrought zinc,waseliminated
27Under thecheck price system, thedeclared transaction value iscompared withvalues specified inthewritten
internal guidelines used bytheCustoms Dept.
28Prior totheimplementation oftheUruguay Round Agreement, Thailand wasanobserver intheGATT
Committee onCustoms Valuation.
29Current legislative authority forimposing surcharges isgiven under theExports andImports Actof1979.WT/TPR/S/9 Trade Policy Review
Page 44
in1994. Currently, industries facing alleged dumping fromimports mustresort totheanti-dumping
regulations administered bytheMinistry ofCommerce.
Table IV.4
Products subject toimport surcharges orspecial duties, 1995
Commodity Rate Rationale Measures andconditions Remarks
M.f.n. imports
Fishmeal withprotein
60%andup2,400 pertonne Tomaintain the
local price level.Importers must paythespecial feeandhave
apayment certificate foreachimportation.Automatic
licensing
Corn foranimal feed 380pertonne Tomaintain the
local price level.Above-quota imports.
Wheat andmeslin flour 40percent Tomaintain the
local price level.Above-quota imports.
Sheets andplates ofiron
andsteel20percent Tomaintain the
local price level.
Non-m.f.n. imports (imposed inaddition tom.f.n. surcharges)
Soybean cake 2,519 pertonne Tomaintain the
local price level.Importers must paythespecial feeandhave
apayment certificate foreachimportation.Automatic
licensing
Corn foranimal feed 1,000 pertonne Tomaintain the
local price level.Importers must paythespecial feeandhave
apayment certificate foreachimportation.Automatic
licensing
Source: Dataprovided bytheThaiauthorities.
(vii) Levies andother charges
50. Thailand imposes excise taxesonalcoholic andnon-alcoholic beverages, tobacco, playing cards,
petroleum andpetroleum products, motor vehicles, yachts, perfume, airconditioners, chandeliers,
leadcrystal andhorse racing (Table AIV.4).30Most oftheexcise taxes arealternate rates, suchthat
thehigher ofanadvalorem oraspecific rateisimposed; theadvalorem portion ranges between
2percent(chandeliers andleadcrystal) and62percent(cigarettes). Onmotor vehicles excise taxes
range between 27and45percent, depending onvehicle type.
51. Excise taxes apply equally toimported anddomestically produced products, except inthecase
ofalcoholic beverages. According totheauthorities, domestically produced alcoholic beverages are
actually taxed atahigher ratethanimported products, resulting fromalong-term monopoly contract
between theproducers andtheGovernment. Thediscrepancy willbeeliminated when thecontract
expires in1999.
52. Excise taxexemptions aregranted topassenger carsandpick-up trucks thatsatisfy local-content
provisions (Chapter V(4)(xiii)), toliquified petroleum gasorpropane usedinproducing electricity
30Since theprevious Secretariat Report in1991 excise taxes were removed oncement, matches, cigarette
lighters andsnuff. Duties were newly imposed onmotor vehicles, airconditioners, chandeliers, leadcrystal,
yachts, perfume andhorse racing.Thailand WT/TPR/S/9
Page 45
forsaletotheState-owned Electricity Generating Authority ofThailand (EGAT), andanumber of
other products.31Exported goods areexempt from payment ofexcise tax.
53. In1992Thailand consolidated itssystem ofbusiness taxesintoageneral VATrateof7percent
ongoods andservices (Chapter I(1)(a)). Forproducts where anexcise taxisalsoapplied, theVAT
islevied onthevalue inclusive ofexcise tax.Refunds ofVAT payments toexporters aremade through
thesystem of"zero rating". VAT isnotimposed ongoods imported intoanexport-processing zone
(iftheyareexempt fromimport duties under thelawsgoverning industrial estates). NoVATexemptions
aregiven forimported goods orrawmaterials aspartofBOIincentives.
(viii) Import prohibitions
54. Thailand 'sbanonimports fromSouth Africa wasremoved in1992. Imports ofproducts from
ororiginating inYugoslavia (Serbia andMontenegro) arecurrently prohibited inconformity tothe
resolution oftheUnited Nations. Imports ofcounterfeit products, andtheequipment fortheir
manufacture, arealsobanned, together withcertain building stone (currently under review); goods
suchasusedmotorcycles andelectrical ormechanically operated games arebanned forreasons ofhealth
orpublic morals. Anumber ofmajor products, suchasLPG, kerosene, motorcycles andcertain buses,
aresubject toconditional prohibitions, withimports allowed onlyunder certain designated conditions
(Table AIV.5).32
(ix) Import licensing
55. Three types oflicensing arecurrently ineffect inThailand: automatic licensing, non-automatic
licensing and"special measures". Non-automatic licensing covers themajority ofitems, especially
agricultural goods, with"special measures" applied onlytoyellow fintuna(environmental conservation)
andwood andsawn wood fromMyanmar (maintaining agood political relationship).33Protection of
domesticindustryremainsthemostcommonjustificationforimportlicensing,followedbytheprotection
ofpublic health andmorals.34
56. Since Thailand 'sprevious Trade Policy Review, thescope ofimport licensing hasdecreased
significantly duetotrade liberalization, withtotalcoverage reduced to53items (Table AIV.5). Of
theliberalized items (Table IV.5), suchgoods astextiles containing 50percentormore silk,tinfoil
andstudent exercise books hadbeensubject tolicensing foroverthree decades.35
31Excise taxexemptions arealsogranted tocertain beverages, fruitandvegetable juices; certain oiland
oilproducts usedinaircraft orships; goods soldtopersons granted diplomatic privileges; naptha reformate,
pyrolysis gasoline andresidual fuel, foruseinarefinery asarawmaterial toproduce oilandoilproducts; and
certain petrochemical products foruseasrawmaterials inthepetrochemicals andsolutions industries.
32Both absolute andconditional import prohibitions areadministered through theimport licensing system.
Details ofthelegislative authority concerning import prohibitions, including theBOI'spotential authority to
selectively banimports ofgoods produced byadomestic industry, arepresented inGATT (1991), pp.107-108.
33General procedures forthegranting andapplication ofimport licences areexplained inthe1991 Secretariat
Report.
34Products subject tomandatory standards, about 40asofMay 1995, alsorequire alicence fordomestic
manufacture ortoimport intoThailand.
35Afulllistofitems subject tolong-term licensing isgiven intheGATT (1991), page 155.WT/TPR/S/9 Trade Policy Review
Page 46
Table IV.5
Listofproducts removed from import controls asofFebruary 1992
1.Riceproducts 17.Glazed setts, flags andpaving, hearth andwalltiles
2.Wood andarticles ofwood 18.Sinks, baths andlikesanitary fixtures
3.Tinfoil 19.Tableware andother articles, ofporcelain
4.Zyclamic acidanditssalts 20.Tableware andother articles, ofother kinds ofpottery
5.Monosodium glutamate 21.Knife-hidden rulers
6.High fructose syrup 22.Cooking gascylinders made ofironorsteelwithcapacity 20-150L
7.Oldnewspapers 23.Used compressed LPGcylinders, ofironorsteel, withcapacity
notover500cubic decimetres, andtheirscraps
8.Paper umbrellas andparts thereof 24.Hulling machines forcrushing husks intobran
9.Student exercise books 25.Ceramic insulators ofspool/strain/pin types
10.Josspaper 26.Circular sawblades (8-23"diameter), chain saws andaccessories
11.Printed matter from China 27.Compressors forrefrigeration equipment
12.Corrugated paper boxes andpaper bags 28.TVcabinets
13.Natural fibrebags 29.Carbodies orcabsofmotor vehicles
14.Jutematsandplastic mats 30.Two-wheeled pedestrian-controlled walking tractors, used
4-wheeled tractors, ofnotover1100cc.
15.Textiles containing 50percentormore ofsilk 31.Files
16.Unglazed setts, flags andpaving, hearth andwalltiles
Source: Information provided bytheThaiauthorities.
Uruguay Round effects
57. Withrespect toagricultural products, theGovernment hastaken aproduct-by-product approach
inconversion from licensing tothetariff quotas required under theUruguay Round Agreement. As
ofSeptember1995,arrangementsfor11of23productgroups(unmanufacturedtobaccoleaves,soybeans,
soybean cake, rice,potatoes, coconuts, coffee beans, maize, skimmed milkpowder, onion seeds and
dried longans) hadbeenimplemented andnotified totheWTO,36withtheobjective ofcompleting the
remainder bytheendof1995. Themainconstraints affecting theconversion totariffquotas, according
totheauthorities, areprocedural.
(x) Import quotas
58. Thailand 'sonlyremaining import quota, according totheauthorities, isimposed ongarlic;
itwasscheduled tobeconverted in1995 toatariff quota, asnoted above, under theUruguay Round
Agreement onAgriculture. Restrictions ontwoitems, two-wheeled walking tractors andused
four-wheeled walking tractors, were removed inFebruary 1992 (Table IV.5).
(xi) State trading
59. Thailand has22State-trading organizations, virtually allofwhich wereestablished inthe1950s
and1960s. Several ofthese organizations exercise monopoly imports rights, forexample thePublic
Warehouse Organization forpotatoes andtea(Table AIV.6). Information onimport andexport levels
36WTO documents G\AG\N\THA\1, 2,3and4,dated 13April, 21April, 4Julyand27September 1995,
respectively. Administrative procedures forquota allocation differ byproduct (Chapter V).Thailand WT/TPR/S/9
Page 47
forState-trading organizations isgenerally notavailable; however, theinfluence ofState-trading on
theThaieconomy appears tohavesteadily diminished overtime. Other State-trading organizations
enjoy exclusive domestic production rights, forexample theLiquor Distillery Organization andthe
Thailand Tobacco Monopoly.
60. Themore influential State-trading organizations, according totheauthorities, arethePublic
WarehouseOrganizationandtheMarketingOrganizationforFarmers,undertheauthorityoftheMinistry
ofCommerce andtheMinistry ofAgriculture andCo-operatives, respectively. Bothareinvolved in
thepurchase andmarketing ofagricultural products (Chapter V(2)(a)). Oftheother State-trading
organizations, mostareunder theauthority oftheMinistry ofAgriculture ortheMinistry ofDefence;
anumber enjoy such privileges asa10percentprice advantage forsales totheGovernment
(Table AIV.6).
61. TheGovernment hasbeenprivatizing orliquidating anumber ofState-trading organizations.
Currently, thePlaying Cards Factory isintheprocess ofprivatization, andprivatization in1995 is
planned fortheThaiPlywood Company Ltd.TheGlass Organization isintheprocess ofconcluding
ajointventure withtheprivate sector. FortheSugar Factory andtheThailand Tobacco Monopoly,
privatization wasbeing considered bytheCabinet. Thethree provincial State-trading organizations
arecurrently undergoing liquidation, withtheGovernment having nointention ofsaving them.
Uruguay Round effects
62. Under Thailand 'splans foradministering thetariffication of23agricultural products, import
allocations foranumber ofitems aregranted onlytoState-trading organizations. Forexample, of
the11items forwhich administrative details hadbeen announced asofSeptember 1995, import
allocations forunmanufactured tobacco andtobacco aremade onlytotheTobacco Monopoly, allocations
forfresh orchilled potatoes aremade solely tothePublic Warehouse Organization, andallocations
foronion seeds aremade onlytotheOnion Growers 'Cooperative.37
(xii) Import cartels
63. Import cartels inThailand created forthepurpose ofrestricting business practices areprohibited
under thePrice-Fixing andAnti-Monopoly Actof1979.
(xiii) Standards, technical regulations andsimilar measures
64. Thailand hasbeenamember oftheInternational Organization forStandardization (ISO) since
1966andisnowintheprocess ofimplementing ISO9000; Thailand alsoacceded totheTokyo Round
Agreement onTechnical Barriers toTrade inNovember 1993. Technical regulations andproduct
standardsapplyequallytoimportedanddomesticallyproducedproducts(TableIV.6).Sincetheprevious
review, changes instandards-related legislation include the1992 revisions oftheCosmetics Actand
theHazardous Substances Act,partly forthepurpose ofconsolidating andstandardizing regulatory
authority. Incertain cases, however, responsibilities apparently continue tooverlap between agencies.
37WTO documents G\AG\N\THA\1, 2and4,dated 13April, 21April and27September 1995, respectively.WT/TPR/S/9 Trade Policy Review
Page 48
Table IV.6
Standards-related legislation inThailand, 1995
Laws/regulations Administrative agencies Main reponsibilities
Industrial Product Standards Act(1968) Thailand Industrial Standards
Institute (TISI),
Ministry ofIndustrySpecifying thequalities, testing methods,
labelling methods, etc.,ofmanufactured and
mining products, processed
agricultural/forestry/marine products,
pharmaceuticals, chemical fertilizers and
others, certification andpromotion of
standardization.
Food Act(1979), Drug Act(1967) and
amendments, Cosmetics Act(1992)
Narcotics Control Act(1979)
Psychotropic Substances Act(1975)
Hazardous Substances Act(1992)
Medical Devices Act(1988)Food andDrug Administration,
Ministry ofPublic HealthSpecifying andcontrolling thecomposition,
including labelling, oflocally made and
imported food, cosmetics, drugs, narcotics,
psychotropics, medical devices and
hazardous substances.
Export Commodities Standards Act Commodity Standards Division,
Department ofForeign Trade,
Ministry ofCommerceSpecifying andcontrolling thequality of
certain commodities, mainly primary
agricultural products, e.g.maize, beans, etc.
Poisonous Articles Act Ministry ofIndustry, Ministry of
Public Health, andMinistry of
Agriculture andCo-operativesControlling theproduction, import, export
andpossession ofhazardous substances.
Fertilizers Act Ministry ofAgriculture and
Co-operativesControlling themanufacture, import andsale
offertilizers.
Consumer Protection Act Consumer Protection Office,
Office ofthePrime MinisterControlling advertising andlabelling of
certain products forconsumer protection.
FuelAct Department ofCommercial
Registration,
Ministry ofCommerceSpecifying andcontrolling thequality offuel.
Animal Epidemics Act(1956) Department ofLivestock
Development, Ministry of
Agriculture andCo-operativesImposing quarantine restrictions, testing or
treatment onanimals andtheirproducts,
either edible orinedible. Import/export
control ofanimals andtheirproducts.
Plant Quarantine Act(1964) ... ...
Animal Feed Control Act(1982) ... ...
Radio Communication Act(1955) ... ...
Fisheries Act(1947) ... ...
Rubber Control Act(1938) ... ...
Plant Seed Act(1975) ... ...
Weights andMeasures Act(1923) ... ...
Enhancement andConservation ofNational
Environmental Quality Act(1992)... ...
Energy Conservation Promotion Act(1992) ... ...
Control ofAnimal Slaughter andSaleof
Meat Act(1992)... ...
... Notavailable.
Source: Information provided bytheThaiauthorities.
65. AsofApril 1995, 1,446 Thai industrial standards have been published, ofwhich 41are
compulsory technical regulations. Thisrepresents anincrease ofabout 325totalandtencompulsory
standards from thefigures reported intheprevious ThaiTrade Policy Review. Products subject to
mandatory standards require alicence fromtheThaiIndustrial Standards Institute (TISI) fordomesticThailand WT/TPR/S/9
Page 49
manufacture orforimport intoThailand.38Atotalofnearly 10,000 certificates andlicences havebeen
granted asofApril 1995, more orlessequally divided between voluntary andcompulsory standards.39
Foreign producers exporting toThailand areeligible toapply totheTISIforthe"Thailand Standards
Mark", butnonehavedonesotodate.
66. TISIisoneofseveral agencies currently involved inthesetting andtesting ofstandards in
Thailand. TISI'soperations aregoverned bytheIndustrial Product Standards Council, consisting of
representatives from various government organizations andfrom theprivate sector. Product testing
isperformed byTISI, theIndustrial Standardization Testing andTraining Centre andauthorized
government andprivate laboratories.40According totheauthorities, thereisnodiscrimination between
imported anddomestic products orbetween imported products fromdifferent origins, andTISIperforms
testing andadministers quality control systems without discrimination against country oforigin (or
theexportingcountry).Foreigntestresultsandtestingproceduresareacceptedwhengrantingcertificates
andlicences forindustrial products, provided thereisamutual recognition arrangement orconformity
assessment procedures areidentical withinternational standards.
67. According totheauthorities, Thaifoodstandards andregulations aremostly inconformity
withCODEX andotherinternational standards. Abilateral standards agreement withJapan isineffect,
aswellasafishery products arrangement withtheEuropean Union; negotiations onstandards were
underway withSouth Africa. Concerning theacceptance offoreign testresults andtesting procedures,
thereiscurrently nomutual recognition between Thailand anditstrading partners; mutual consultations
areplanned.41
(a) Health andsafety requirements
68. Thailand 'sFood andDrug Administration (TFDA) monitors andregulates production, sales
andimports offooditems, drugs, cosmetics, hazardous substances, narcotics, psychotropic substances
andmedical devices (Table IV.7). International standards areusedasthebasis formonitoring and
regulation. Inaddition torevisions oftheCosmetics ActandtheHazardous Substances Act,changes
since 1991inThailand 'shealth andsafety requirements include theaddition ofmedical devices tothe
listofregulated products.42
38Anoverview oftheproducts previously covered byTISI, andtheproducts covered bycompulsory standards,
isgiven onpages 119and120ofGATT (1991). Additions tocompulsory standards since 1991 concern portable
fireextinguishers, fluorescent lamps, solidalcohol fuel,A.C. electric fans,two-stroke gasoline engine lubricating
oil,gasoline-powered vehicles, motorcycles, electric stoves, motorcycle exhaust mufflers andlight-duty
diesel-powered vehicles.
39TISI grants licences onthebasis oftypetesting, random samples, factory surveillance andassessments
offactory quality control levels. According totheauthorities, theadvantage toforeign exporters ofcertification
fornon-compulsory standards istoprovide reliable product quality forThai consumers.
40Therelevant regulations concerned are: theIndustrial Product Standards Act(1968) asamended bythe
Industrial Product Standards Act,No.2(1979), No.3(1979), No.4(1988), andNo.5(1992).
41Forcosmetics,theauthoritiesstatetheywillrecognizetestingproceduresindicatedinofficialpharmacopoeia,
subject totheapproval ofThailand government agencies.
42These aredescribed inpages 120, 121andAnnexes IV.3 andIV.4 ofthe1991 Secretariat Report.WT/TPR/S/9 Trade Policy Review
Page 50
Table IV.7
Regulatory requirements forproducts controlled bytheThailand Food andDrug Administration (TFDA), 1995
Type ofTFDA licence/registration
Food Specific-controlled Manufacture, Import, Registration requirement
Standardized Manufacturea,Importa,Registration requirement
Specially labelled Manufacturea,Importa,Registration requirement
Other general food Manufacture, Importa
Drugs Modern Manufacture, Import, Sale, Registration requirement
Traditional Manufacture, Import, Sale, Registration requirement
Cosmetics Specially controlleda
Controlleda,bRegistration requirement
GeneralaImport
Narcotics Schedule I
Schedule II Sale, Possession
Schedule III Manufacture, Import, Export, Sale, Registration requirement
Schedules IVandV Manufacture, Import, Export, Sale, Possession, Registration requirement
Medical devices General control Manufacture, Import, Export, Sale, Registration requirement
Listing Manufacture, Import, Export, Sale
Registration andlicensing Import
Hazardous
substancesType 1a,c
Type 2a,cRegistration requirement
Type 3aManufacture, Import, Export, Possession, Registration requirement
Type 4d
a Labelling requirements.
b Registration notrequired, butcertain information must benotified totheTFDA.
c Must comply withspecified criteria andprocedures.
d Production, import, export andpossession areprohibited.
Source: Information provided bytheThaiauthorities.
69. Revision oftheCosmetics Act,according totheauthorities, wasrequired inthelightofchanging
conditions within theindustry. Unlike the1974 Act,theActof1992 permits self-regulation bythe
industry, withenforcement monitored bytheTFDA. Aswellasmandating consumer protection as
oneoftheTFDA 'sresponsibilities, thenewActisintended toprovide greater operating flexibility
fortheindustry, andtopromote foreign investment andinternational trade.43FortheHazardous
Substances Act,previous regulations were under thecontrol ofthree different authorities. Major
objectives ofthe1992 Actaretoconsolidate andstandardize regulatory authority, together with
expanding thescope tocover alltypes ofhazardous substances.44
70. AfeeofBaht12,000 ischarged foraone-year permit toimport drugs intoThailand, andup
tothreemonths mayberequired fortheTFDA toissuethepermit.45Asnoted inTable IV.7, registration
isalsorequired forimported drugs.
43Preface totheThai Cosmetics Act,1992.
44Revision oftheHazardous Substances Actresulted intheprevious product classifications of"highly toxic"
and"others"beingregroupedintofournewclassificationsof"Type1"through"Type4"asindicatedinTableIV.7.
45USTR (1995), National Trade Estimates onForeign Trade Barriers, p.303.Thailand WT/TPR/S/9
Page 51
(b) Sanitary andphytosanitary regulations
71. Sanitary andphytosanitary regulations inThailand areapplied tofooditems andplants (and
theirproducts) bymeans ofregistration, licensing, quarantine inspections andlabelling controls. All
imported fooditems mustbeapproved bytheTFDA, andfoodimporters anddomestic manufacturers
must belicensed; applications must include adetailed listofingredients andadescription ofthe
manufacturing process fortheitemconcerned.46Changes since 1991 inThailand 'ssanitary and
phytosanitary regulations, which aredescribed inpages 122-124 andAnnex IV.5 oftheprevious
Secretariat Report, include twonotifications bytheMinistry ofPublic Health. Thefirst, issued in
1993, revises thelistofsubstances prohibited foruseinfoods, andthesecond notification, issued in
1994, revises thelistoffoods forwhich manufacture, imports anddistribution areprohibited.47
72. AfeeofBaht15,000 isrequired forathree-year permit toimport foodintoThailand. "Specific
controlled" foodproducts, currently 39processed andpackaged fooditems (Table AIV.7), require
additional licensing bytheTFDA atacostofBaht5,000 peritem. Approval andregistration ofthese
fooditems generally requires anaverage ofthree months; however, uptooneyearmaybenecessary
inexceptional cases.
Uruguay Round effects
73. InMay1995Thailand made itsfirstthree notifications under theUruguay Round Agreement
onTechnical Barriers toTrade.48These concerned standards forhot-rolled structural steelsections;
forplugs andsocket-outlets forhousehold andsimilar purposes; andforcold-formed structural steel
sections. Anadditional threenotifications followed inAugust, involving safety andemission standards
forgasoline-engined vehicles andlight-duty diesel-engined vehicles andstandards forprotective helmets
forvehicle users.49
(xiv) Government procurement
74. InThailand, Government purchases areusually made through tenders issued bytheMinistry
(orotherend-user) concerned; thereisnocentralized purchasing agency. According totheauthorities,
information isnotavailable ontheamount orpattern ofgovernment procurement. Purchasing methods
andprocedures arecurrently administered under the1992Regulation onProcurement, combining two
previousprocurementregulations,oneofwhichspecificallyconcernedprocurementforprojectsfinanced
byforeign loans.50Thailand isanobserver totheGATT Agreement onGovernment Procurement
and,according totheauthorities, isnowconsidering membership intheWTO Procurement Agreement.
46USTR (1995), p.304 states that"theoverall licensing process poses animport barrier onmany foodproducts
because ofitscost, duration andrequirement forproprietary information". According totheauthorities, two
committees have been established bytheGovernment (oneforpharmaceuticals andanother forfoodproducts)
toexamine these issues.
47Notification Nos. 151and154, respectively.
48WTO documents G/TBT/Notif.95.123, 124and125, dated 3May 1995.
49WTO documents G/TBT/Notif.95.241, 242and243, dated 16August 1995.
50Please refer tothe1991 Secretariat Report, pp.126-127 fordetails ofthetwoprevious regulations.WT/TPR/S/9 Trade Policy Review
Page 52
75. MostThaiproducts, defined asfinished products manufactured byafactory located inThailand,
aregiven a10percentpreference margin ingovernment procurement, provided thattheproduct meets
therequired standards oftheThaiIndustrial Standards Institute. Fordomestic products notinvolving
TISIstandards, themargin ofpreference isreduced tothree percent.51Inaddition, anumber of
State-owned enterprises, asnoted inChapter IV(2)(xi), enjoy a10percentprice advantage forsales
totheGovernment.52Forservices, except construction services, a10percentmargin ofpreference
isgiven toThaisuppliers.
76. Fivemethods ofconducting procurement bidsarecurrently usedbytheGovernment, based
primarily oncontract value. Forcontracts valued below Baht50,000 (upfromBaht20,000 in1991),
theprocurement officer bargains directly withthesupplier. Forcontracts between Baht50,000 and
Baht1,000,000 (upfrom Baht20,000 andBaht400,000, respectively), anotice isdisplayed inthe
office oftheagency concerned, andinvitations forquotations aresenttoatleastthree suppliers. For
contracts above Baht1,000,000 (upfrom Baht400,000), competitive bidding isrequired, including
radio ornewspaper announcements. Thefourth method usedisaspecial caseprocedure forcontracting
directly withanother Government agency, Stateenterprise orlocaladministrative body, andthefinal
method isanon-competitive procedure, involving products suchascomputer software.53
77. Avarietyofcriteriaisusedinassessingprocurementbids,includingprice,creditterms,delivery
schedule, maintenance, service andproduct quality. According totheauthorities, norestrictions are
made onbidding byforeign suppliers, other thaninconstruction (where foreign contractors mustbid
jointly withThaicontractors). However, theOffice oftheAttorney-General hasauthority toreview
bidding documents andcontracts written byanimplementing agency toensure national interest.
Uruguay Round effects
78. Following theconclusion oftheUruguay Round negotiations, Thailand iscurrently considering
membership under theWTO intheplurilateral Agreement onGovernment Procurement.
(xv) Local content requirements
79. AspartofThailand 'strade-related investment measures (TRIMs), local-content requirements
arecurrently applied todomestic production ofpassenger cars(54percentlocalcontent required),
lighttrucks (65-80 percent), trucks andbuses (40-50 percent), motorcycles (70percent) anddairy
products (minimum purchase of50tonsoflocal rawmilkperdayinthefirstyearofoperation).
Manufactured milkanddairy products, aswellasengines forautomobiles andmotorcycles, diesel
enginesforagricultureandmulti-purposebenzeneenginesarealsosubjecttolocalcontentrequirements.54
51Fortelecommunicationsequipment,localsuppliershavethesamepreferencesunlessinternationalcompetitive
bidding (ICB) isrequired aspartofarrangements forforeign loans.
52Inthe1991SecretariatReport,itwasstatedthatprocurementfromASEANcountrieswasofferedapreference
of2.5percentorUS$40,000, whichever waslower. According totheThaiauthorities, however, theregulation
isapparently notused among anyofthegovernment departments.
53Adeposit of5to10percentofthebidisusually required, toberefunded forunsuccessful bids.
54WTO document G\TRIMS\N\1\THA\1, dated 28April 1995, provides details ofcurrent TRIMs andthe
relevant legislation.Thailand WT/TPR/S/9
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Excise taxexemptions aregranted topassenger carsandpick-up trucks satisfying local-content
requirements (Chapter V(4)).
80. Accordingtotheauthorities,anoriginalpurposeinapplyingTRIMsinThailandwastoencourage
theestablishment ofindustries crucial tofurther industrial development, andtoencourage technology
transfer. Alllocal-content requirements previously imposed on14BOI-related investment activities
wereabolished inApril 1993, except those concerning production ofmilkanddairy products, engines
andmotorcycleassembly.Asubstantialnumberofpreviouslyapprovedprojects,however,areobligated
tocontinue observing local-content requirements forafixed timeperiod.55Inaddition, localcontent
requirements wereuseduntilNovember 1990asacriteria forgranting corporate income taxexemptions;
some previously approved projects remain subject tolocalcontent requirements. According tothe
authorities, specific details concerning theremaining number ofsuch projects arenotavailable.
Nevertheless, theBOIwillabolish alllocalcontent requirements, including those imposed prior to
April 1993, bytheendof1999.
Uruguay Round effects
81. Under theUruguay Round Agreement onTrade-Related Investment Measures, theGovernment
acknowledges thatThailand isobliged toeliminate localcontent measures within fiveyears (end-1999).
TheTRIMs Agreement willseriously affect Thailand 'sinvestment policies bylimiting options for
policymakers, according totheauthorities.
(xvi) Anti-dumping andcountervailing dutyactions, andsafeguard measures
82. Thailand 'santi-dumping andcountervailing dutyregulations (1991) areadministered bya
government committee under theMinistry ofCommerce, onthebasisofawritten complaint submitted
byamajority ofthedomestic producers concerned. Anti-dumping duties areimposed forafive-year
period, which cannot beextended. There arenoautomatic review procedures; however, areview
could beconducted attherequest ofinterested parties, orifthegovernment committee concerned deems
itappropriate.56Thailandtookitsonlyanti-dumpingactionin1994againstimportsofhydrogenperoxide
from India, withprovisional andfinalduties of30percentimposed inJuneandNovember 1994,
respectively.57
83. Drafts ofanewlawtoreplace Thailand 'scurrent anti-dumping legislation, inconformity with
Thailand 'sWTO obligations, weretobeputtotheCabinet in1995. Details ofthenewlaw,which
istoinclude afive-year sunset clause, were tobemade available inOctober 1995.
55WTO document G\TRIMS\N\1\THA\1 alsoliststheninelocal-content schemes where previous projects
arestillsubjecttolocal-contentrequirements.TheseincludeTVpicturetubes,coatedaluminiumsheetsforprinting,
power transformers, gaspressure thermostats, transmission assembly, compressors forairconditioners, andpaper
products.
56Details ofThailand 's1991 anti-dumping andcountervailing dutyregulations were notified totheWTO
indocument G/ADP/N/1/THA/2, dated 14June 1995.
57WTO document G/ADP/N/2/THA, dated 31March 1995.WT/TPR/S/9 Trade Policy Review
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(3) Measures Directly Affecting Exports
(i) Registration andnotification requirements
84. Exporters inThailand arerequired toobtain aCertificate ofExportation from anauthorized
bank; thiscertificate allows theCustoms Department toclear thegoods forexport. Anexporter
identification card, issued bytheCustoms Department, isalsorequired aspartofcustoms procedures.
Exports oftextiles, tapioca, coffee, rice,longans andseafood require registration withtheDepartment
ofForeign Trade oftheMinistry ofCommerce.
(ii) Export taxes andsurcharges
85. Export duties continue tobeimposed onrawanimal hides, wood, sawn wood, andveneers,
atlevels ranging from 3to10percentfortheadvalorem rates (Table IV.8).58Advalorem tariff
equivalents in1994forthetwospecific export duties, applied torawanimal hides andcertain woods,
were3and2percent,respectively. Duties onrawsilkandsilkyarnwereeliminated in1991, together
withthose onparings, waste anddustfromanimal hides foruseinleather manufacture. Thereason
fornoteliminating thefewremaining export duties, asstated bytheauthorities, istoencourage the
usedomestically oftheproducts concerned.
Table IV.8
Applied export duties andsurcharges inThailand, 1995
Commodity Rate
Export duties
Hides ofbovine animals:
Rawhides Baht5perkg.
Other Baht4perkg.
Wood, sawn wood andarticles made ofwood:
Wood andsawn wood, ofgenus Hevea 3percent
Bamboo-stalk andwood ofcoconut trees 5percent
Veneers 10percent
Export surcharges
Rawcoffee beans Baht5perkg.
1990-91 1991-92 1992-93 1993-94 1994-95 1995-96
Ballbearing exports totheEuropean Union Baht1.76
perunitBaht1.61
perunitBaht1.49
perunitBaht0.91
perunitBaht0.66
perunitBaht0.66
perunit
Source: Information provided bytheauthorities.
86. Since 1990, Thailand hasimposed asurcharge onexports ofballbearings totheEuropean
Union (EU), withtheratedeclining overtime, forthepurpose ofpreventing countervailing duties
bytheEU.For1995, thesurcharge rateisBaht0.66perunit(Table IV.8). Areview ofthesituation
bytheEUwasscheduled forJuly1995, withtheoutcome tobeannounced inOctober 1995. Anexport
surcharge ofBaht5perkilogram isinplace forexports ofrawcoffee beans.
58Applied basis; statutory export duties arediscussed inGATT (1991), p.131.Thailand WT/TPR/S/9
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(iii) Minimum prices
87. Minimum export prices oncanned pineapples, which, according totheauthorities, were
maintained toprevent priceundercutting byexporters, wereremoved in1992. Minimum export prices
oncanned clams exported toItaly, imposed attherequest oftheItalian Government, werealsoremoved
in1992.
(iv) Export prohibitions
88. Thailand removed itsbanonexports toSouth Africa in1992. Exports ofproducts toYugoslavia
(Serbia andMontenegro), aswellasexports offueloilandproducts viaThailand 'seastern provinces,
arecurrently prohibited under therelevant resolutions oftheUnited Nations. Exports ofcounterfeit
products andtheequipment fortheirmanufacture, natural sand(forconservation reasons) andcertain
re-exports (inaccordance withbilateral agreements) arealsobanned.59Asignificant number ofproducts,
suchasbeancakes, wood andwood articles, rattan, non-chemical fertilizers, wood charcoal andmost
types ofcoalaresubject toconditional export prohibitions toensure supplies fordomestic use.Other
conditionalprohibitionsareimposedforenvironmentalandanimalconservationreasons(TableAIV.8).60
(v) Export licensing andother controls
89. Three types ofexport licensing arecurrently ineffect inThailand: automatic licensing,
non-automatic licensing and"special measures". Thescope ofexport licensing hasbeennarrowed
significantly since 1991to36product groups.61Maize, soybeans, copper, ironsheets, pesticides and
chemical fertilizers areamong theliberalized products (Table IV.9). Non-automatic licensing isapplied
tomost oftheremaining items, primarily various animal species, withenvironmental protection as
themostcommon rationale. "Special measures" areapplied tofiveagricultural andfisheries product
groups inorder toregulate exports ortoconform withbilateral agreements (Table AIV.8).
Table IV.9
Listofproducts removed from export controls asofFebruary 1992
Maize Copper, brass Pesticides
Soybeans, kapok seeds, cotton seeds Ironstrands Chemical fertilizers
Castor seeds Ironsheets Molasses
Baby clams Ironscrap Pulpforpaper products
Canned pineapple Aluminium scrap Goods re-exported toCommunist
countries orcommunitiesPlatinum, jewelry Ironcontainers, over200litres
Source: Information provided bytheauthorities.
59Thebanoncertain re-exports applies toproducts, under certification withtheoriginating countries, not
tobere-exported tothird countries attherequest ofthesuppliers.
60Asnoted earlier, bothabsolute andconditional import prohibitions areadministered through theimport
licensingsystem.DetailsofthelegislativeauthorityconcerningexportprohibitionsarepresentedinGATT(1991),
pp.133-136.
61General procedures forthegranting andapplication ofexport licences areexplained inthe1991 Secretariat
Report onThailand. Forcertain agricultural items, export licences aregranted only tomembers ofthe
corresponding trade associations; forfuelandsugar, export licences aregranted onlytorefineries andcertain
trading firms, respectively (GATT (1991), p.135).WT/TPR/S/9 Trade Policy Review
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90. Export standards, administered bytheOffice ofCommodity Standards under theMinistry of
Commerce, areapplied fortencommodities. Exporters arerequired toproduce standards certificates
fortheproducts concerned, andtousespecific customs stations tomonitor these items.62Themain
objective oftheexport standards istoenhance theinternational credibility ofThaiproducts. Standards
toensure thequality ofbothdomestically consumed andexported industrial products aresetbythe
ThaiIndustrial Standards Institute.
(vi) Export restraint arrangements andexport quotas
91. Thailand previously imposed voluntary export restraints (VERs) ontapioca products tothe
European Union (EU), andnegotiated bilateral restraints under theMultifibre Arrangement (MFA)
ontextile andclothing exports toAustria, Canada, theEU,Finland, Sweden (until 1992), Norway
andtheUnited States.63Fortapioca products (i.e.cassava), theVERwaseliminated in1995following
tariffication ofimports bytheEU. Thailand hasbeenallocated anannual tariff quota of5.5million
tonnes bytheEU(butamaximum of21million tonnes overeachfour-year period) under tariff item
HS0714.10, bytheEU. Boththeinitial andfinalin-quota tariff ratesare6percent.
92. Export quotas, previously usedtoimplement theVER mentioned above, remain inplace on
tapioca product exports totheEU.Export restraint arrangements ontextile andclothing exports, which
werepartofvarious bilateral arrangements negotiated under theformer MFA, havebeen"rolled over"
intotheWTO Agreement onTextiles andClothing asthestarting point fortheten-year transitional
phase-out programme.64According totheauthorities, quota andmonopoly export arrangements for
sugar were cancelled in1994; sugar export quotas arebased onsupply capacity.
93. Thecurrent system ofexport quota allocations fortapioca products isbased onacombination
ofstockpiles andbonuses. Among therecent changes aretheaddition ofnon-EU salesasacriteria
forallocations. Nofurther details havebeenprovided; according totheauthorities theactual system
forquota allocations isextremely complicated. For1994-95 thequota allocation totheEUis
5.25million tonnes: 3.5million tonnes areallocated onthebasis ofstockpiles, 1.5million tonnes
based onpastperformance andtheremainder based onincentive measures.
(vii) Export cartels
94. Under Thailegislation, export cartels arenotprohibited. However, according totheauthorities,
theGovernment issues guidelines for"free andfairtrade" andusesmoral suasion toencourage
competition.
62Theitems concerned areteakconversion (converted timber derived fromthesawing ofteak), maize, tapioca
products, kapok fibre, castor seed, black matpe beans, fishmeal, mung beans, sorgum andraworprocessed
kenaf (butnotspun).
63After theaccession ofAustria, Sweden andFinland totheEUin1995, theEU'simport quotas fortextiles
andclothing were enlarged totakeaccount ofimports intothese markets.
64Quota allocations inThailand fortextile exports arebased onacombination ofthebasic quota, allocated
onthebasis ofpastexport performance; thepromotional quota, allocated tothose participating ingovernment
trade promotion activities; andthesupplementary quota, allocated toallexporters, including newcomers. Details
ofquota allocations aregiven inChapter V(4)(iii).Thailand WT/TPR/S/9
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(viii) Countertrade
95. Countertrade hastraditionally beenanegligible share ofThailand 'soverall trade. During the
mid-1980s, itwasprimarily regarded asameans ofdisposing ofsurplus agricultural commodities.
Thailand'scurrentpolicyoncountertradearrangements,intended,accordingtotheauthorities,topromote
Thaiexports andhelpmitigate thetrade imbalance, requires thatanyprocurement bygovernment
agencies orState enterprises valued above Baht500million must apply countertrade measures. A
recently reported countertrade arrangement wastheagreement withNorth Korea tosupply Thairice
inexchange forsteel.65
(ix) Export subsidies
96. Thailand maintains export subsidies onagricultural products, according totheauthorities, in
amanner consistent withthose ofdeveloping country members under theUruguay Round Agreement
onAgriculture. Noinformation isavailable onthenature andextent ofthese subsidies.66
(x) Export incentives
97. Until 1993, export promotion wasanimportant (andhighly successful) aspect ofThailand 's
economic anddevelopment policies. Although export performance remains acondition forforeign
direct investment (FDI) levels above thenormally applied 49percentceiling (Chapter III(2)), and
forcertain BOIincentives (Table AIV.1), export promotion hasbeensomewhat superseded byregional
development asadirect government objective. Bringing Thaiinvestment measures intoaccord with
theobligations taken intheUruguay Round ontrade-related investment measures (TRIMs) isonereason
forthechange inpolicy.
98. Export-oriented investment projects continue toreceive tariffandtaxconcessions andanumber
ofother benefits, especially iflocated within theInvestment Promotion Zone (Section (2)(ii)(e) and
Table AIV.1).67Despite themultiplicity ofprogrammes designed toassist exports, asdescribed below,
exporters receiving benefits under oneprogramme aregenerally barred fromreceiving similar benefits
underotherprogrammes.Inthecaseofdutydrawbacks,forexample,BOI-promotedinvestmentprojects
aretypically eligible forspecial incentives foronlyoneyear,afterwhich theyrelyonnon-BOI schemes
fordutydrawbacks.68
65Financial Times (1995), 6April. Thearticle states thatThailand hadagreed tosupply 300,000 tonnes of
riceonthecondition thatNorth Korea make apayment onaUS$23 million debtforearlier ricepurchases.
66Nocommitments were made byThailand toreduce agricultural export subsidies aspartofitsUruguay
Round obligations.
67Forexample, projects exporting atleast 30percentofsales areallowed todeduct from taxable income
5percentoftheincrement inexport earnings overthepreceding yearforaperiod oftenyears aftertherevenues
arefirstderived.Exportersareexpectedtobenefitfromtheprogramme oftariffreductionsannouncedinDecemb er
1994 through lower input costs, notwithstanding theweakening effect thereductions willhave onThailand 's
promotional schemes.
68VAT rebates onexports areadministered separately, withrefunds made bytheRevenue Department of
theMinistry ofFinance, generally within onemonth orless. Since 1991, according totheauthorities, rebates
arenolonger granted onother taxes (i.e.excise andmunicipal taxes).WT/TPR/S/9 Trade Policy Review
Page 58
99. Products thatarenotsubject totaxrebates, primarily agricultural goods suchasriceandmaize,
arelisted inAnnouncement No.1/1992 oftheCommittee Considering Import Duty Drawbacks for
ExportProductsProducedDomestically;proceduresforcompensationforeligibleproductsarespecified
intheAnnouncement oftheCustoms Department No.20/1994.69Procedural changes aremade from
timetotimethrough additional Announcements, themost recent being Announcement No.4/1993
oftheCustoms Department concerning measures toincrease administrative efficiency.
100. BOI-related dutyexemptions aregranted prior toexports actually taking place. Onthebasis
ofaninput-output formula submitted bythefirmtoreceive theexemption, amaximum ceiling for
duty-free imports isdetermined byaBOIcommittee foreacheligible investment project. Theceiling
isthenadjusted onthebasisofeachimport andexport transaction.70International trading companies
granted BOIpromotional benefits before 1981arestilleligible forimport dutyexemptions, asreported
onpage139oftheprevious Secretariat Report.
101. Forexporters ineligible forBOIexport incentives, forexample smaller-scale producers and
those whose incentives haveexpired, theCustoms Department willrefund allexcept 10percentor
Baht1,000 (whichever islower) ofimport duties ongoods thatarelaterre-exported. Apriorexemption
scheme, based ontheuseofbankguarantees, isthemain mechanism usedforthispurpose, although
exporters mayalternatively choose adutydrawback system forimport duties already paid.71According
totheauthorities, bothschemes follow therecommendations oftheKyoto Convention concerning
export-related dutyrebates.
102. Athirdprogramme involving exporters isthetaxrebate scheme oftheMinistry ofFinance 's
Fiscal Policy Office. Thescheme isdesigned primarily torebate import duties oninputs usedtomake
products notdirectly exported bythemanufacturer.72Therebates arepaidtotheexporter intheform
oftaxcertificates. Product eligibility andrebate levels aredetermined bytheCommittee for
Determination ofTaxRebates forLocally-Produced Goods, based ontheuseofaninput-output table
todetermine anadvalorem taxcomponent foreachofmore than5,000 different products.73According
totheschedule for1995, rebates range from alowof0.03percent(cassava, sweet potatoes, etc.)
toahighof8.23percent(motor carsandother vehicles).
103. TheMinistryofFinanceimposedaceilingof1percentoftotalgovernmenttaxanddutyrevenue
onthetaxrebate scheme in1993, down from2percentpreviously. Payments under thescheme had
been expanding rapidly, reaching Baht 6billion by1990, butby1994 hadincreased only to
Baht6.3billion. Under theTaxandDutyCompensation ofExported Goods Produced intheKingdom
69Asnoted above, thegranting oftariff concessions isbased onthecondition thatproducts ofsimilar quantity
donotoriginate, orareproduced orassembled, inThailand insufficient quantity tobeused inthepromoted
activity.
70GATT (1991), p.138.
71Both schemes require thesubmission ofdesign andproduction formulas. Forcertain products, astandard
formula maybeused bytheCustoms Department forallexporters (GATT (1991), pp.139-140).
72Twocategories ofdomestic salesarealsoeligible forthescheme. These aresales ofgoods tointernational
organizations andsales togovernment organizations (orenterprises) paidatleastpartially byaforeign loanor
aid(GATT (1991), p.141).
73Applicable taxes onwhich rebates areallowed include customs duties, VAT, excise taxes, municipal taxes,
andother taxes added inthecostofmaterials, machinery, equipment, spare parts, fuelandpower.Thailand WT/TPR/S/9
Page 59
Act(1981), theCustoms, Revenue andExcise Departments arenormally authorized tosetaside up
to1percentoftaxanddutycollections; ifthere arereasonable grounds, thismayberaised toup
to2percent.
104. Firms located within theInvestment Promotion Zone (Chapter IV(4)(i)) maybeeligible for
additional incentives, suchasadditional income taxreductions (Table AIV.1); noneoftheseadditional
incentives, however, aredirectly related toexports.
105. Rawmaterials maybeimported intoabonded manufacturing warehouse, ofwhich there are
currently 147,without thepayment ofimport (orexport) taxes andtariffs when thematerials areto
beusedasinputs forproducts destined forexport orarethemselves re-exported. There areno
geographic restrictions onthelocation ofthewarehouses. Taxes andduties onfinished products are
calculated bytheCustoms Department onthebasisofaninput-output formula submitted bytheexporter.
(xi) Export financing
106. TheExport Import BankofThailand (EXIM Bank) wasestablished inFebruary 1994, assuming
operation oftheexport refinancing facility formerly administered bytheBank ofThailand.74Services
providedbytheEXIMBankalsoincludeshort,mediumandlong-termcredits,aswellasloansyndication
facilities forinvestment projects inneighbouring countries.
107. ThePacking Credit Scheme, initiated bytheBank ofThailand approximately 40years ago
andnowadministered bytheEXIM Bank, continues tobethemain export refinancing facility for
supplying export credits through commercial banks.75According totheauthorities, however, the
significance oftheScheme hasdeclined considerably duetothefactthatfunding hasstagnated inrecent
years while totalexport value hasgrown substantially. Theaggregate value ofexport billsplaced as
collateralundertheSchemein1994wasBaht117.7billion,about10percentofThailand'stotalexports.
108. Themajor change intheScheme since Thailand 'sprevious TPRwastoraisetheinterest rates
charged toexporters incertain cases tonotlessthanthedomestic prime rate. Thiswasdoneinorder
toendretaliatory measures imposed bytrading partners, whocharged thatThailand hadsubsidized
exports ofcotton fabric andyarn, ballbearings, irontubes andcanned seafood through useofbelow-
market interest rates.76TheEXIM Bank hasalsointroduced apreshipment facility, atmarket interest
rates, asacomplementary short-term export-financing facility forexporters unable toobtain adequate
credits from commercial banks. According totheauthorities theaccess ofsmall-scale exporters to
concessional ratesunder thePacking Credit Facility hasbecome more stringent duetolimited funds.
74Under regulations adopted in1988, theBank ofThailand provided loans foruptohalfthefacevalue of
promissory notes purchased bycommercial banks, withtheremainder financed bythebanks themselves (GATT
(1991), p.144). Thecurrent situation remains unchanged withrespect totheactivities oftheEXIM Bank.
75Under thePacking Credit Scheme, eligible exporters apply tocommercial banks forcredit. Once the
application isapproved bytheEXIM Bank, exporters mayselltheirpromissory notes tothecommercial bank,
whothenresells uptohalfofthevalue ofthenotes totheEXIM Bank.
76Annual interest rates charged under theEXIM Bank'sexport financing facilities areasfollows: onthe
Packing Credit Facility, nomore than10percent(compared toapresent EXIM prime rateof11.5 percent);
Preshipment Facility, theprime plus1.5percentiftheloanisinBaht orbased onLIBOR ifinU.S. dollars;
medium-term credit forbusiness expansion, prime plus1.5percent; long-term financing forexport ofcapital
goods andservices, prime plus1.5percentifinBaht orbased onLIBOR ifinU.S. dollars.WT/TPR/S/9 Trade Policy Review
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Withregard toother facilities, suchasthePreshipment Facility, theauthorities notethatconcessional
ratescannot beoffered asfunding fortheEXIM Bank isatmarket rates.
(xii) Export marketing assistance
109. Export development andpromotion inThailand isadministered bytheDepartment ofExport
Promotion under theMinistry ofCommerce. Among theDepartment 'sactivities aretrade missions
andparticipation intrade fairs, together withsupport forvarious industry training institutes.
(xiii) Export performance requirements
110. Asnoted, export performance requirements remain ineffect asacondition forforeigners to
holdequity positions greater than49percentinaThaienterprise, aswellasforcertain regional-based
incentives (Chapter III(2) andTable AIV.1). Asageneral rule,however, theBOIsince April 1993
hasnotimposed export performance requirements onspecific industries asacondition forreceiving
investment incentives, except for12to27-inch colour TVpicture tubes, where export requirements
were eliminated fornewprojects inJanuary 1995. Asaresult oftheUruguay Round Agreements,
theBOIwillgradually phase-out theuseofexport performance requirements.
(xiv) Export insurance
111. TheExport Credit Guarantee Fund, described intheprevious Secretariat report asapproved
inprinciple, wasnever implemented, duetotheestablishment oftheEXIM Bank which holds
responsibility forexport refinancing.
(xv) GSPbenefits
Table IV.10
Exports under GSP, 1991-94
(US$ million)
1991 1992 1993 1994
European Union 3,057 3,762 3,900 4,454
United States 1,240 1,865 2,082 2,487
Japan 760 938 1,063 1,284
EFTA 305 366 369 403
Canada 97 148 155 181
Former socialist countriesa167 55 97 174
Australia 248 ... ... ...
NewZealand ... ... ... ...
Total 5,874 7,134 7,666 8,983
... Notavailable.
a Russia, Poland, Hungary, Czech Republic, Slovak Republic andBulgaria.
Source: Dataprovided bytheauthorities.
112. Between 1991and1994, exports under theGeneralized System ofPreferences rosesignificantly,
from approximately US$5.9 billion toUS$9 billion (Table IV.10), accounting for34percentof
Thailand 'stotalexports inthelatter year. Major export products forwhich Thailand doesnotreceiveThailand WT/TPR/S/9
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GSPbenefits from Canada, theEU,Japan andtheUnited States areprimarily agricultural products,
footwear andcertain textiles (Table IV.11).
Table IV.11
Major Thai exports thatdonotreceive GSPbenefits
Preference-giving country European Union United States Japan Canada
Export products not
receiving GSPbenefitsCanned tuna, frozen
chicken, milled rice,
tapioca starchCertain textile products,
footwear, articles of
leather, canned pineappleSilkfabric,
leather gloves,
footwearCertain textile
products, footwear
Source: Thaiauthorities.
(4) Measures Affecting Production andTrade
(i) Investment promotion
113. Regional development hasbeenhighlighted bytheThaiGovernment asthemost important
theme ofcurrent investment promotion policies; consequently, export promotion hasrecently been
de-emphasized(ChapterIV(3)(xii)).Otherrecentchangesincludeanincreasedemphasisonparticipation
bysmall andmedium-sized firms ininvestment incentives through areduction inminimum capital
requirements77,aswellasinitial steps topromote overseas investment byThais (Chapter III(1)).
Table IV.12
Investment promotion inThailand, 1995
(A)TheBoard ofInvestment (BOI) gives special consideration, under theInvestment Promotion Actof1977 toinvestment
projects which:
-locate operations inprovincial areas;
-establish industries forming abaseforfurther stages ofindustrial development;
-develop public utilities &basic infrastructure;
-conserve natural resources andreduce environmental problems;
-conserve energy orreplace imported energy supplies;
-contribute totechnological development; and
-significantly strengthen thebalance ofpayments.
(B)Asasecondary objective, thefollowing sixsectoral priorities forinvestment promotion have alsobeen identified by
theBOI:a
-basic transportation systems; -technological development;
-public utilities; -basic industries (currently steelandpetrochemicals); and
-environmental protection andrestoration; -designated supporting industries (Part C).
(C)Designated supporting industries asofJune 1994:a,b
-tooling equipment; -heattreatment; -moulds anddies;
-cutting tools; -machining centres; -jigsandfixtures;
-grinding tools; -electronic connectors; -forging; and
-sintered products; -Ni-Cd andother rechargeable batteries; -casting withinduction furnices.
-surface treatment; -engineering plastics;
a Investment inthese areas aregranted aneight-year corporate income taxexemption.
b Ownership limits onforeign direct investment inthese areas arecurrently waived.
Source: Information provided bytheBoard ofInvestment, Government ofThailand.
77PriortoApril1993theBOIrequireddifferentlevelsofminimumcapitalrequirementsfordifferentactivities;
in1993 theBOIreduced theminimum capital requirements forallpromoted projects toBaht 1million.WT/TPR/S/9 Trade Policy Review
Page 62
114. Asasecondary objective ofinvestment policy, sixlargely sectoral priorities forpromotion
havebeenidentified, including anumber ofsupporting industries (Table IV.12). Investment projects
inthese areas aregranted aneight-year corporate income taxexemption, regardless oflocation.78For
thedesignated supporting industries, theusual 49percentceiling onequity holdings byforeigners
iscurrently waived. According totheauthorities, theBOIdoesnotintend toreimpose theequity ceiling.
115. Other thanrequirements onforeign direct investment (Chapter III(2)), domestic andforeign
firms aretreated onanequal basis interms ofaccess toinvestment incentives (Table AIV.1); these
incentives, however, arelimited tospecified industries (Table AIV.9).79Inaddition, import duty
exemptions arenotgranted formachinery andequipment thatcanbemanufactured orassembled in
Thailand (Table AIV.10). Thetimeframes forBOIproject consideration andrelated procedures are
presented inTable AIV.11, withthelongest timeperiod required forinitial project analysis (60working
daysforprojects ofBaht40-200 million, 90daysforprojects above Baht200million).80Changes
havebeen made since 1990 tothelistofindustries eligible forinvestment promotion tosimplify
procedures, match incentives more closely withinvestment objectives andensure compatibility for
statistical purposes.
116. Inprevious years theBOIdidnotgrant investment incentives tocertain industries, andasked
theMinistry ofIndustry toissue announcements prohibiting newinvestment orexpansion inthese
industries. According totheauthorities, theBOIhavesince rescinded these requests.81
117. While netforeign direct investment (FDI) inflows represent onlyasmall, anddeclining, share
oftotalbusiness investment, FDIaccounts foramuch greater share oftotalapproved investment for
BOIincentives. Fortheyears 1992-94, theFDIshare oftotalapprovals was94,62and59percent,
respectively. Bysector, services accounted forthelargest share ofinvestment approved forBOI
incentives in1994, followed closely bythechemicals andpaper category; forFDI-related investment,
thelargestsharewasforchemicalsandpaper,followedbyelectricalandelectronicproducts(ChartIV.2).
118. Among thethree geographic designations forinvestment promotion, theZone 3region (plus
theLaem Chabang industrial estate) hasbeendesignated bytheBOIsince 1989 astheInvestment
PromotionZone.82ProjectslocatingwithinthisZoneareeligibleforadditionalincentives(TableAIV.1).
78Itshould beobserved thattheBOIcriteria remain sufficiently broad tointroduce anelement ofdiscretion
intothesystem (GATT (1991), p.148 (fn151)).
79TheBOIregularly revises thelistofeligible industries, largely onthebasis oftheperceived development
needs oftheeconomy. Information onBOI incentives andguarantees forforeign investors isgiven in
Chapter III(2); details ofallrequirements andconditions related toinvestment incentives arepresented inthe
BOIpublication AGuide totheBoard ofInvestment, February 1995.
80Nomajor changes havebeen made since 1991 intheadministrative procedures forobtaining promotional
privileges. These procedures aredetailed inAnnex IV.6(pp.165-168) ofGATT (1991), aswellasintheBOI
publication AGuide totheBoard ofInvestment.
81TheGovernment hasusedregulations authorized under theFactory Acttocontrol theproduction capacity
ofdomestic factories andhasusedcapacity licensing toinfluence thegeographical location andownership pattern
ofindustries (GATT (1991), p.147).
82Asnoted above, Zone 1isdefined bytheBOIforinvestment purposes asBangkok andthefiveadjacent
provinces; Zone 2isthe10provinces adjacent toZone 1;andZone 3istheremaining 57provinces plusthe
Laem Chabang industrial estate.Thailand WT/TPR/S/9
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119. Thailand currently maintains 23industrial estates and21industrial zones/parks, with12located
inZone 1,13inZone 2and19inZone 3.83Most oftheindustrial estates areadministered bythe
Industrial Estate Authority ofThailand (IEAT) withtheremainder developed andadministered jointly
between theIEAT andtheprivate sector. Theindustrial zones/parks aremanaged andowned bythe
private sector. While theBOIoffers incentives toinvestment projects ingeneral, theIEAT offers
incentives toprojects located within industrial estates only.84
120. IndustrialestatesinThailandtypicallyincludeaGeneralIndustrialZoneandanExport-Processing
Zone, withtheIEAT providing larger concessions ontaxes anddutyratestoprojects located inthe
Export-Processing Zone. General advantages oflocating within anindustrial estate include land
ownership rights forforeign-owned firms, therighttobring inskilled personnel, a10percentreduction
inelectricity rates forfiveyears anda10percentreduction inlandtransport costs.85Additional
incentivesforlocatingwithinanExport-ProcessingZoneincludeexemptionsfromsurchargesonimported
capital goods andrawmaterials; exemptions from payment ofVAT, excise duties andexport taxes
onexported goods; andexemption frompayment oftaxesandduties onlocalgoods usedinproduction.
83In1991,atthetimeofThailand'spreviousTradePolicyReview,18industrialestatesandExport-Processing
Zones were inoperation orplanned (GATT (1991), pp.149-150).
84TheIEAT issues allpermits needed foroperating anindustry intheindustrial estates; ithasresponsibility
forsurveying, planning, designing, constructing andmaintaining these areas.
85GATT(1991),p.150.Therighttoownlandandbringinskilledpersonnelisalsograntedtoforeigninvestors
receiving BOIinvestment incentives (Chapter III(2)).WT/TPR/S/9 Trade Policy Review
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According totheauthorities, thenumber ofprojects located inindustrial estates andapplying for
investment promotion benefits rosefrom 142to197between 1993 and1994.
(ii) Regional assistance
121. Theimportanceattachedtoregionaldevelopmentsince1993isreflectedinthepracticeofoffering
thegreatest incentives toprojects locating inthemostremote areas, i.e.intheZone3geographic region,
inorder tohelpoffset infrastructural deficiencies andotherdisadvantages. Inaddition, theBOIprovides
substantial incentives forrelocating existing investment projects toregional areas (Table AIV.1). As
ofJune1995, atotalof105factory relocation applications havebeensubmitted, ofwhich 72were
approved. According totheauthorities, mostactivities ontheinvestment promotion list(Table AIV.9)
arenolongersubjecttoexportperformancerequirements;instead,thesehavebeenreplacedbylocational
requirements, especially forlocation inZone 3.
122. Therevised investment incentives haveapparently contributed toasharp increase, byvalue,
inFDIprojects locating inZone 3(andseeking incentives), rising fromabout 46to75percentbetween
1992and1994(Chart III.2). Thetotalnumber ofBOI-approved investment projects inZone 3increased
from166in1992 to773by1994. Additional factors (other thanthechange inincentives) connected
withtheincreased share ofZone 3investments include increasing congestion andrising production
costsinBangkokandtheneighbouringprovinces.Tohelpsupporttheresultingincreaseininfrastructural
requirements, thenumber ofindustrial estates located inZone 3hasgrown rapidly.
123. TheEastern Seaboard Development Project andtheSouthern Seaboard Development Project
arepartoftheGovernment 'sefforts todecentralize industrial production andpromote regional
development.86TheformerincludesapartiallyState-ownedpetrochemicalcomplex(ChapterV(4)(viii)),
adeep-sea portandtwoindustrial promotion zones. According totheauthorities, Thailand isnow
moving towards thesecond phase oftheEastern Seaboard Project, including asecond international
airport (expected tobeinoperation bytheyear2000), ahigh-speed trainservice toBangkok, an
additional heavy aircraft maintenance centre anda"global transpark" project.
(iii) Adjustment assistance
124. According totheauthorities, theemergence ofnewlower-cost producers, suchasChina, has
ledtoincreasingly severe competition intheexport market. Rising production costs, especially labour
costs, haveeroded Thailand 'scompetitiveness inlow-end product sectors, e.g.textiles. Inresponse,
theGovernment hasincreased efforts topromote higher value-added sectors. Inaddition, theauthorities
taketheview thattherelocation incentives offered bytheBOIshould helpinthetransfer of
less-competitive labour-intensive activities tolower-wage regions.87
125. Thailand doesnothaveanyformal programmes, according totheauthorities, forstructural
adjustment; rather thatassistance isprovided onanad-hoc basisastheneedarises. Examples include
reduced feesfortinmining andarubber plantation replanting scheme (financed byataxonexports).
86GATT (1991), p.152.
87Existing operations mustemploy atleast100people tobeeligible forrelocation incentives (other thanthose
facing environmental problems andrequired torelocate bytheMinistry ofIndustry asdetailed in
Chapter IV(4)(viii)).Thailand WT/TPR/S/9
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(iv) Pricing andmarketing arrangements
126. Price controls areineffect forthree items asofApril 1995: pork, refined sugar andcooking
gas.88Suchcontrols areimposed bytheGovernment 'sCommodity Price-Fixing andAnti-Monopoly
Committee.89According totheauthorities, price controls areneeded incases ofessential consumer
goods andcommodities withirregular price movements; nodistinctions aremade between imported
anddomestically produced products. Withtheexpected implementation oftheBusiness Competition
ActandthePrice Stabilization ofGoods andServices Act(Chapter IV(4)(vi)), theauthorities believe
thatprice controls arelesslikely tobeusedinthefuture.
127. Forcertain major agricultural crops, pricesupport hasbeenmaintained through leadpurchases
bytheGovernment, e.g.ricein1989-90.90
(v) Assistance forresearch anddevelopment
128. Since1993,theBOIhasofferedaneight-yearincometaxexemptionforresearchanddevelopment
(R&D)activities,regardlessoflocation,includingin-houseR&D.ForpromotedBOIprojects,additional
income taxandimport tariff concessions areavailable ifinvesting inR&D activities (Table AIV.1).
129. FiveinstitutesinThailandprovideadditionalincentivesforR&D:theNationalResearchCouncil
ofThailand; theOffice ofPromotion andTechnology Transfer; theNational Science andTechnology
Development Agency; theThailand Research Fund; andtheThailand Institute ofScientific and
TechnologicalResearch.Forcertainindustries,suchassugarproduction,feesareimposedonproduction
tofinance R&D forthatindustry.91
(vi) Competition policy
130. Restrictive business practices inThailand arecurrently regulated under thePrice-Fixing and
Anti-MonopolyActof1979,whichaddressesbothcompetitionlawandconsumerprotection.According
totheauthorities, Thaicompetition lawneeds toberaised tointernational standards, particularly with
aviewtoimproving domestic economic efficiency. Thus, theGovernment intends toreplace thecurrent
Actwithtwoseparate Acts, bothnowindraft: these aretheBusiness Competition Act,toaddress
anti-monopoly issues, andthePrice Stabilization ofGoods andServices Actforconsumer protection.
131. ImportcartelsinThailandareprohibitedunderthe1979Act;nomeasuresareineffect,however,
concerning parallel imports andexclusive dealerships. TheCentral Committee onPrice-Fixing and
Anti-MonopolyactsasThailand'scompetitionauthority,andhasthepowertoreferviolationsforcriminal
88Price controls onanimal feedwere eliminated in1992. Price controls were placed oninstant coffee from
October 1994 toJuly1995.
89Incertain cases, thisresults intheGovernment subsidizing theconsumer (GATT (1991), p.153).
90GATT (1991), p.153.
91GATT (1991), p.151.WT/TPR/S/9 Trade Policy Review
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prosecution. Maximum penalties arecurrently seven years ofimprisonment andafineofBaht200,000.
In1994 oneinvestigation waspursued, concerning price increases forinstant coffee.92
(vii) Intellectual property rights
132. Thailand hasaccepted theUruguay Round Agreement onTrade-Related Aspects ofIntellectual
Property Rights (TRIPS), andintends toimplement theTRIPS Agreement within thetransition period
permitted fordeveloping countries.93Intellectual property-related lawstobeadopted byThailand as
aconsequence oftheTRIPS Agreement are:theProtection ofPlants Variety Act(within tenyears);
theProtection ofGeographical Indications Act(within fiveyears), theProtection ofIntegrated Circuits
Act(within fiveyears), andtheProtection ofUndisclosed Information Act(within fiveyears).
Modifications werealsorequired intheProtection ofIntellectual Property Act(already inforce) the
Patents Act,theTrademarks ActandtheCopyright Act. InThailand 'sview, however, "theTRIPs
Agreement takes insufficient account ofdeveloping countries 'development level, especially inareas
suchascomputer software andpharmaceutical products".
133. InMay1994theThaiCabinetapprovedthesettingupofanintellectualpropertyandinternational
tradecourt, withadraftbillapproved inSeptember 1994andoriginally expected tohavebeensubmitted
toParliament inApril 1995.94Main features ofthenewcourt arethejudge'sright, incaseof
emergency, toorder seizure ofevidence inadvance, andtherighttoappeal verdicts directly tothe
Supreme Court. According totheauthorities, Thailand 'sCivil Court hasstrengthened procedures
concerning intellectual property cases, especially concerning evidential requirements andthehearing
ofwitnesses. Thailand hasalsotaken action under theCopyright Actregarding national treatment
forintellectual property, toensure thatforeign rightholders havethesame access tolegalprotection
asThainationals, withadditional steps tobetaken under thePatents andTrademarks Laws.
134. In1931 Thailand became party totheBerlin Act(1908) oftheBerne Convention forthe
Protection ofLiterary andArtistic Works and,in1980, became party toArticles 22to38oftheParis
Act(1971) oftheBerne Convention. In1989 Thailand joined theWorld Intellectual Property
Organization (WIPO), aswellastheBerne Union.95Thailand hasnotacceded totheRome Convention
(International Convention fortheProtection ofPerformers, Producers ofPhonograms andBroadcasting
Organizations) asitconsiders performer 'srights, aswellasrights forproducers ofsound recordings
andbroadcasting organizations, tobeprotected under thedomestic Copyright Actof1994. Thailand
alsohasnotyetacceded totheTreaty onIntellectual Property inRespect ofIntegrated Circuits.96
92InOctober1994theCommitteeforCommodityPrice-FixingandMonopolyPreventionmandatedthatinstant
coffee beputontheprice control list(Bank ofThailand (Dec. 1994), Quarterly Bulletin, p.29).
93Thailawsdonotspecify any"grandfather" rights tobeapplied byThailand under theTRIPS Agreement.
Thelaws clearly state thatmeasures arenottoberetroactive, particularly incriminal cases.
94Following thedissolution ofParliament inearly 1995, thedraft billwasagain submitted totheParliament
inSeptember 1995.
95InSeptember1995ThailandisduetoextenditsaccessiontoArticles1-21oftheParisAct(1971).According
totheauthorities, Thailand willsoon accede totheParis Convention fortheProtection ofIndustrial Property
andtothePatent Cooperation Treaty.
96According totheauthorities, Thailand 'saccession depended ontheoutcome ofasub-committee studying
theissue.Thailand WT/TPR/S/9
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135. AnASEAN working group, chaired byThailand, wascreated in1994 toseekanagreement
onintellectual property; adraftagreement waspresented attheApril 1995Ministerial informal meeting
inPkuket, Thailand, andwasfurther discussed ataspecial meeting inBangkok inAugust 1995.
According totheThaiauthorities, thedraftframework provides forinformation exchange andhuman
resource development, aswellconsidering thepossibility ofestablishing regional patent andtrademark
offices.
136. Asaresult ofthecountry 's1994Copyright Act(described below), Thailand wasmoved from
theU.S."priority watch list"onintellectual property tothelesser "watch list". In1989US$860 million
inGSPbenefits hadbeenremoved forwhattheUnited States claimed wasinadequate IPRprotection;97
theUnited States hassince restored GSPbenefits for11ofthe15affected items. According tothe
authorities, market investigations andraids offactories andretail shops areconducted onaregular
basis tosuppress theproduction andsaleofinfringing merchandise (Table IV.13). Agovernment
report onintellectual property rights enforcement inThailand isprepared andsenttothePrime Minister
eachmonth.98
Table IV.13
Statistics onsuppression ofintellectual property rights violations inThailand, 1993-95
Legislation concerned1993 1994 January -April 1995
Arrests Materials
seizedArrests Materials
seizedArrests Materials
seized
Copyright Acts(1979 and1994) 336 123,652 527 246,410 120 42,868
Trademark Act(1991) 631 215,219 770 1,062,044 208 100,584
Patent Act(1992) 8 906 16 12,285 0 0
ActControlling theCassette Business
andTelevision Devices (1987)1,661 615,374 468 75,588 141 6,603
Total 2,636 955,151 1,781 1,396,327 469 150,055
Source: Dataprovided bytheauthorities.
(a) Copyright andrelated rights
137. Thailand 'snewCopyright Act(1994) entered intoforce inMarch 1995. Protection isgiven
during thelifeofthecreator, plus50years; under Thailaw,acopyright isconsidered toariseupon
creation ofawork andregistration isnotrequired. According totheauthorities, protection extends
toliterary works (including databases andcomputer programmes), dramatic, artistic, musical,
audio-visual, cinematographic works, sound recordings, sound andvideo broadcasting works andall
other materials intheliterary, scientific andartistic domains. ThenewActisconsidered bythe
authorities tocomply withThailand 'sTRIPS requirements andtheParisActoftheBerne Convention.99
97International Trade Reporter (1994) 30November, p.1,838.
98Asnoted above, Thailand bansbothimports andexports ofcounterfeit products andtheequipment fortheir
manufacture.
99TheThai authorities state thatcertain provisions ofthenewCopyright Actextend beyond theTRIPS
requirements, forexample, additional protection ofanauthor 'smoral rights, performers 'rights andtheuseof
copyright inspecial circumstances.WT/TPR/S/9 Trade Policy Review
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138. Copyright holders aregiven additional protection under thenewlegislation, including theright
toseekinjunctions andrecover investigation costs andlegal expenses. Officials oftheDepartment
ofIntellectual Property aregiven therighttoseizepirated goods uponrequest ofthecopyright holder
andtoenteranypremises where suchgoods aresuspected tobeheld. Penalties fordirect infringement
forcommercial purposes range fromBaht100,000 toBaht800,000, withprison terms ofsixmonths
tofouryears. Exception clauses inthecaseofcomputer software include software usedbygovernment
agencies, educational programmes andpersonal use.100
(b) Trademarks
139. TrademarksinThailandarerecognizedundertheTrademarksAct(1991).101Ownersofregistered
trademarks aregiven protection fortenyears, withtheregistration renewable forunlimited ten-year
terms. Trademarks identical orsimilar towell-known trademarks arenotregisterable andthose already
registered could berevoked. Alsoprotected areservices, certification marks andcollective (well-known)
marks. Statistics ontrademark applications andregistration inThailand, given inTables IV.14 and
AIV.12, indicate asharp riseinthenumber oftrademark registrations between 1993 and1994; the
increase, according totheauthorities, isduetoThailand 'sefforts toclearuptheapplications backlog,
aswellasgreater public awareness ofthebenefits oftrademark registration.
Table IV.14
Trademark andpatent statistics forThailand, 1990-94
Year Applications Registrations Year Applications Registrations
Trademarks Patents
1990 12,863 10,173 1990 2,555 474
1991 12,338 10,048 1991 2,586 625
1992 13,378 8,156 1992 2,633 386
1993 15,463 8,147 1993 3,345 451
1994 15,869 13,003 1994a2,889 462
Total 69,911 49,527 Total 14,008 2,398
a Through September 1994.
Source: Dataprovided bytheauthorities.
140. ApplicationsfortrademarkregistrationmustbefiledwiththeDepartmentofIntellectualProperty
attheMinistry ofCommerce. Toqualify, atrademark mustmeettherequirements ofdistinctiveness,
differentiation from other registered trademarks andnotbeinviolation ofpublic order ormorality.
Thailand 'sTrademark Actadopts theInternational Classification ofGoods andServices, inaccordance
withtheNiceAgreement (1977).
100(International Trade Reporter, 16November 1994, pp.1,752-1,753; 23November 1994, p.1,808; and
30November 1994, p.1,838.) According totheauthorities, enforcement ofcomputer software copyright is
currently focused onapublic awareness campaign, advocating group licences forcompanies, arresting counterfeit
softwaredistributorsandcooperatingwithmajorrightsholders,suchastheBusinessSoftwareAlliance.Violations
bysoftware retailers arebeing targeted ahead ofthose byendusers.
101AsofSeptember 1995, Thailand hadnotyetadopted theParis Convention fortheProtection ofIndustrial
Property, butwasexpected todosointhenearfuture.Thailand WT/TPR/S/9
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141. Amendments required inThailand 'strademark legislation, inorder toconform totheTRIPS
Agreement, include: anamendment onequal treatment fornationals ofcountries outside theBerne
Union whohaverealandeffective industrial orcommercial establishments inUnion countries; the
addition ofprotecting theuseofaregistered trademark bytheproprietor inadiffering formnotaltering
thedistinctive character ofthemark; theaddition ofprotecting concurrent useofthesame mark by
co-proprietors; andanamendment ontherighttorenew trademark registrations within sixmonths
from theexpiry date.
(c) Patents
142. Thailand 'sPatents Act(1979), asrevised bythePatents Act(No.2)of1992, includes both
invention anddesign patents; aninvention maybeintheform ofaproduct orprocess. Theterm
ofprotection, applied from thedateoffiling, is20years forinventions andtenyears fordesign.
Statistics ontrademark applications andregistrations, given inTables IV.14, AIV.13 andAIV.14,
show averysmall number ofpatent registrations (lessthan20percent) compared tothenumber of
applications. According totheauthorities, themainfactor accounting forthesmall number ofpatent
registrations isthedeferred examination system; afterthefiling oftheapplication andpublication,
theapplicant mustrequest asubstantive examination. Theaverage timeperiod required forgranting
asuccessful registration istwotothree years.
143. Under thePatents Act,inventions aredefined asanyinnovation orinvention which creates
anewproduct orprocess, oranyimprovement onaknown product orprocess. Product designs are
defined asanyformorcomposition oflinesorcolours thatgiveaspecial appearance toaproduct and
canserve asapattern foranindustrial orhandicraft product. Applications forpatents mustbesubmitted
totheDepartment ofIntellectual Property attheMinistry ofCommerce. Current penalties forpatent
infringement areimprisonment ofnotlessthantwoyears, and/or afineofBaht400,000.
144. Revisions made tothePatent Actin1992 extended protection topharmaceuticals andtheir
ingredients, foodandbeverages andagricultural machinery; thetermofprotection wasincreased to
20years fromthedateoffiling. Therevised lawauthorized compulsory licensing ofpharmaceutical
products notmarketed inThailand, anddidnotprovide protection topharmaceutical products patented
inother countries butnotyetmarketed inThailand (i.e."pipeline protection").102Thelegislation also
created aPharmaceutical Patent Board withthepower torequire patentholders toreveal costandpricing
information, andtoimpose penalties forexcessive prices.103In1993 administrative measures were
taken toincrease protection forpharmaceuticals; restrict thescope ofcompulsory pharmaceutical
licensing, eliminate localmanufacturing requirements; andreduce thepower ofthePharmaceutical
Patent Board.104Asaresult oftheTRIPS Agreement, according totheauthorities, thepower ofthe
Pharmaceutical Patent Board andthescope ofcompulsory licensing havebeenmore clearly defined,
102Pipelineprotection,accordingtotheauthorities,isprovidedineffectbytheThaiFoodandDrugAssociation
under the1994 Rules onTransitory Provisions toConduct Safety Monitoring Procedures andBioequivalence
Study ofNew Drugs.
103Exporters 'Encyclopedia (1994), DunandBradstreet Information Services, p.1,432.
104United States Trade Representative (1993), National Trade Estimates onForeign Trade Barriers, p.267.WT/TPR/S/9 Trade Policy Review
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inorder toreduce theundue burden onthepatentee andtoprovide clearer guidelines foractivation
ofthecompulsory licensing process (Table AIV.16).105
145. Additional changes tobemade tothePatents Act,inorder toconform totheTRIPS Agreement
include: addition ofthenational treatment principle; addition ofpriority rights tonationals of,or
persons having residence in,member States oftheParis Convention; elimination oftheworking
requirement ofapatent; addition ofconditions forcompulsory licensing ofdependent patents; and
theaddition ofprovisions onthePatent Cooperation Treaty.
(d) Other intellectual property (geographical indications, industrial designs, layout designs of
integrated circuits andtrade secrets)
146. Asnoted above, intellectual property related lawstobeadopted byThailand asaconsequence
oftheUruguay Round Agreement include theProtection ofGeographical Indications Act(within five
years), theProtection ofIntegrated Circuits Act(within fiveyears), andtheProtection ofUndisclosed
Information Act(within fiveyears). Legislation inthese areas iscurrently being drafted, andwill
subsequently besentforCabinet approval.
(viii) Environmental measures
147. Among thenewenvironment-related measures implemented since theprevious Trade Policy
Review ofThailand aretheFactory Actof1992andtheEnvironmental Quality andConservation Act
(1992). According totheauthorities, bothActswillenforce the"polluter pays" principle. Industrial
facilities, aswellasother significant pollution sources, suchashigh-rise buildings, arenowrequired
tohavetheirowntreatment facilities.
148. Overall, Thailand 'senvironmental protection policies aredescribed bytheauthorities asmoving
towards preventative measures. Pollution-intensive industries arenolonger permitted tosetupin
Bangkokandsurroundingareas,andtherelocationofexistingfacilitiesisincludedthroughBOIincentives
andother measures. TheBOIhasalsoincluded environmental protection considerations within its
investment promotion programmes.106
105Under current law,intheevent thatthePharmaceutical Patent Board finds there hasbeen nosaleofa
drugprotectedbyapatent,thatsalesareatanexcessivepriceorthatsupplyofthedrugisunjustifiablyinsufficient,
theBoard isempowered tonotify competition authorities andtorecommend thatthesituation bepublicized in
theGovernment Gazette.
106Theseprocedures,essentiallyunchangedsince1991,aredetailedinAnnexIV.7(pp.169-170)oftheprevious
Secretariat report, aswellasintheBOIpublication AGuide totheBoard ofInvestment.