A spat over exports from Thailand and their inspection by American officials has been defused, saving the weakened sector further problems, sources have told Asia Cargo News.
“This was OK overall and did not affect the export of goods or export volumes,” an official with the Thai National Shippers Council (TNSC) said. The official declined to be named.
American officials had made some comments, and it was up to the Thai side to digest them and change some things, the TNSC staffer said, while stressing there was no major problem looming.
“It is not affecting any goods, any exports from Thailand,” the official said, pointing out the disagreement was about inspection procedures at the ports, and not the actual goods themselves.
This covers both the Bangkok river port and the gateway port of Laem Chabang, the official added. However, in future, American inspections will be expanded to include the private ports throughout Thailand, which move some 5% of Thailand’s outbound goods.
The US Embassy in Bangkok confirmed to Asia Cargo News that the ships are not on the US Coast Guard security advisory list. “Thailand has shown commitment to implementing the [International Ship and Port Facility Security] Code, and is not listed on the US Coast Guard’s Port Security Advisory list,” an embassy statement read.
Exporter groups at the end of last year had expressed concerns that American plans to inspect security and anti-smuggling procedures would create obstacles for Thai exporters already dealing with drooping shipments as China’s economy cools.
“If our ports fail to meet their quality requirements and are put on the watch list, vessels from Thailand may be subject to 100% strict inspections instead of random inspection as of now. Longer docking may result in higher transport costs, troubling Thai operators,” Nopporn Thepsithar, chairman of the Thai National Shippers Council, told the Bangkok Post newspaper before the dispute ended.
Thailand is sensitive to any criticism, but especially that from the Americans, over issues as diverse as human trafficking and political development. The fear was that port inspections would complicate already weakened exports.
A recent forecast by the University of the Thai Chamber of Commerce (UTCC) said exports would expand by 2% this year, the first positive growth in four years. The projection was compiled by the Center for International Trade Studies of the UTCC and matched by an TNSC prediction of 2% export growth.
Tellingly, the centre has linked the sector’s recovery to the global economic recovery, which is predicted to grow by 3.4% according to the the International Monetary Fund. (The IMF predicted in October 2015 that the global economy would grow by 3.6% this year, but revised its prediction downward earlier this month.)
Aat Pisanwanich, the centre’s director, said Thai exports could rely on markets in the United States and in the CLMV – Cambodia, Laos, Myanmar, Vietnam – region, provided that global economic growth follows the IMF’s prediction.
A particular problem for Thailand is that exports to China, one of its largest markets, look set to remain in the doldrums for the third year in a row, dipping by a further 1.1%, according to the UTCC. Particularly likely to be problematic are rice, rubber and rubber products, plastics and machine parts, although the outlook for China-bound consumer goods is brighter, as is that for jewellery.
Another bright spot is cars and car parts, both last year and this, although not necessarily to China.
“Last year we exported 1.2 million cars,” an official with Laem Chabang, Thailand’s gateway port, told Asia Cargo News, figures backed up by statistics on the website of the Thai Automotive Industry Association.
There was growth particularly of eco-car shipments, notably to North America, Europe and Australia, a local research house said in a note.
“KResearch forecasts that car exports may have grown 9% in 2015, with the number of autos shipped beating a record of over 1.23 million units, 500,000 of which were passenger cars, equivalent to a 19% jump,” the Kasikorn Research report said.
Markets such as Australia, the Philippines, Peru, New Zealand and Japan would remain firm in the coming year, with sales in new ones such as Mexico, the US, many European countries, Laos and Vietnam, expected “to swell,” it said.
“KResearch believes that car exports in 2016 will probably register 2-6% expansion with total sales reaching perhaps [1.25 million to 1.3 million] units. We project that passenger cars will make up over 40% of the total exports,” it added.
This was backed up by Laem Chabang port. “This year, we think [we will have] approximately a 5-10% increase,” the port official added.
By Michael Mackey
Southeast Asia Correspondent | Bangkok