Thai Union Group unaffected by US GSP cut

Thai Union Group unaffected by US GSP cut

The decision by US President Donald Trump to cut Thailand’s access to preferential trade concessions under the Generalized System of Preferences (GSP) programme will have no effect on Thailand’s largest seafood exporter

A presidential decree signed Saturday (Oct 26) stripped access for about one-third of Thai exports eligible for the reduced import tariff.

A statement posted on the website of the US Trade Representative’s office (USTR) said 53 classes of product, including seafood, electrical appliances and electronics components, food and agriculture products, and machinery will be excluded from the scheme. The removal will affect about $1.3 billion in exports. In 2018 about $4.5 billion in Thai exports entered the US at reduced tariff rates.

The USTR statement said duty-free treatment will be revoked for all Thailand’s seafood exports to the United States over longstanding worker rights issues in the seafood and shipping industries.

GSP cut no effect on Thailand operations

While Thailand government officials have been scurrying to determine the effect of the announced cuts, a statement issued yesterday afternoon by Thai Union Group (TUG) said the actions will have no effect on its Thailand operation.

“At this time, I do not foresee this decision by the USTR as having an impact on our business”, said TUG CEO Thiraphong Chansiri, adding that “no TUG seafood or pet food products sold into the US from Thailand are currently covered by the GSP”.

Thiraphong Chansiri, CEO, Thai Union Group: we aim to be the world’s most trusted seafood leader
Thiraphong Chansiri, CEO, Thai Union Group: we aim to be the world’s most trusted seafood leader Su

Mr Thiraphong said Thai Union is firmly committed to working with governments around the world to improve worker rights in global supply chains and pointed to the SeaChange global sustainability initiative it launched in 2015 as one example of that.

The SeaChange initiative comprises an integrated plan of initiatives designed to drive meaningful improvements across the entire global seafood industry. A key pillar is a commitment to worker rights through providing safe, legal, and freely-chosen employment in TUGs facilities, or in its supply chains.

In 2015 after an AP report showed that its shrimp supply chain was tainted with questionable labour practices, TUG announced it would cease using sub-contractors. The previously unplanned for occurrence saw it spend more than $5 million bringing some 1,000 workers from external pre-processing factories in house.

Suppliers found in breach of illegal, unreported, and unregulated (IUU) fishing rules, or labour or human rights standards, had their contracts terminated. The company also initiated an aggressive compliance inspection routine for all of its suppliers.

Thai Union #1 globally for sustainable practices

Last month Thai Union was ranked number one globally in the Food Products Industry Index of the Dow Jones Sustainability Indices (DJSI) for the second year in a row.

The company scored an industry best-in-class 100 per cent ranking for total sustainability, and the same for Codes of Business Conduct, Supply Chain Management, and Human Rights. It was the sixth successive year for TUG to be listed.

Thai Union Group prawns being packaged in Thailand
Thai Union Group prawns being packaged in Thailand Nick McGrath

The 40-year-old company has grown to become one of Thailand’s largest corporations, employing more than 47,000 people globally.

The company’s global brand portfolio includes market-leading international brands such as Chicken of the Sea, John West, Petit Navire, Parmentier, Mareblu, King Oscar, and Rügen Fisch.

In Thailand it is better known for SEALECT, Fisho, Qfresh, Monori, Bellotta, and Marvo. The world’s largest producer of shelf-stable tuna products, TUG sales in 2018 exceeded THB133.3 billion (about US$4.1 bln).

Thailand’s director-general of the Department of Foreign Trade (DFT), Keerati Rushchano, was scheduled to hold a media briefing this morning to discuss the impacts of the Trump GSP cut.

 

Feature photo TUG 

 

Related: 

  • Trump’s GSP seafood cut gives Thailand 2020 GDP an early whack (video) (AEC News Today)
  • U.S. duty-free loss could cost Thai products $60 million: minister (Reuters)
  • Thai Government claims GSP move by US unrelated to chemicals ban (Thai PBS)

 

 

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John Le Fevre

Thailand editor at AEC News Today

John is an Australian national with more than 35 years experience as a journalist, photographer, videographer and copy editor.

He has spent extensive periods of time working in Africa and throughout Southeast Asia.

He has covered major world events including the 1991 pillage riots in Zaire, the 1994 Rwanda genocide, the 1999 East Timor independence unrest, the 2004 Asian tsunami, and the 2009, 2010 and 2014 Bangkok political protests.

In 1995 he was a Walkley Award finalist, the highest awards in Australian journalism, for his coverage of the 1995 Zaire (now Democratic Republic of Congo) Ebola outbreak.

Prior to AEC News Today he was the deputy editor and Thailand and Greater Mekong Sub-region editor for The Establishment Post, predecessor of Asean Today.

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