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Spotlight: international trade law in Thailand – Lexology

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Overview of trade remedies
Thailand has been an active user of trade remedy measures during the past two decades. To date, Thailand has initiated a total of 52 trade remedy investigations, of which 46 were anti-dumping (AD) investigations and six were safeguard investigations. However, Thailand has never initiated any countervailing (CVD) or anti-circumvention (AC) investigations to date, though this is likely to change in the future as a result of changes to the legal framework and the domestic industries’ perceived need for CVD and AC investigations.
The main target countries of trade remedy measures imposed by Thailand are Asian countries, primarily China, South Korea and Taiwan. The majority of trade remedy investigations have revolved around steel and metal products.
In 2020, Thailand experienced a spike in the number of trade remedy investigations initiated by the Department of Foreign Trade (DFT), with a total of 10 investigations and reviews initiated, compared to four investigations and reviews initiated in the previous year.
Legal framework
The primary AD and CVD legal instrument under Thai law is the Anti-Dumping and Countervailing Act BE 2545 (1999), which was amended by the Anti-Dumping and Countervailing Act (Issue No. 2) BE 2562 (2019) (the AD/CVD Act). In addition, there are 14 relevant sub-regulations that provide detailed rules and administrative procedures for AD and CVD investigations.
The legal provisions of Thai trade law are modelled on, and broadly consistent with, the World Trade Organization’s (WTO) legal framework. Nonetheless, there are also some elements under Thai law that do not appear in the WTO legal framework, as outlined below.
First, Section 7 of the AD/CVD Act imposes a broad obligation on the investigating authorities to take into consideration the impacts on the importers, end users and the public when imposing AD or CVD measures.
In past investigations, the DFT relied on the public interest clause for providing exemptions to the AD measures. The most common form of application of the public interest clause is a re-export exemption whereby the AD committee collects AD duty at zero per cent on subject merchandise that is imported for production and re-export.2
In addition, the public interest clause is used as the legal basis for providing exemptions to certain product specifications, usage or application in certain downstream industries. The common exemptions under this category include exemptions for the import of products for use in the automotive industry and the home appliance industry that have strategic importance to the Thai economy, as well as certain product specifications that cannot be produced by the domestic industry. It should be noted that the DFT has never relied upon the public interest consideration as the sole reason to terminate outright any investigation or not to impose measures.
Second, Thai law provides a significantly different definition of domestic industry from the definition in the WTO legal framework. Under the WTO Anti-Dumping Agreement (ADA), a domestic industry is defined as the domestic producers whose production output constitutes a major proportion of the total domestic output. However, the AD/CVD Act explicitly provides that the required production output of the domestic producers must be more than half of the total domestic production output. As a result, the DFT has little flexibility when determining legal standing and representation of the domestic industry.
The primary legal instrument of safeguard investigations is the Safeguard Measure Against Increased Imports Act BE 2550 (2007) (the Safeguard Act). In addition, there are 10 sub-regulations that are applicable to safeguard investigations.
Thai safeguard laws are broadly transposed from the WTO Agreement on Safeguards. However, the laws are silent on other obligations mandated in Article XIX of the General Agreement on Tariffs and Trade (GATT), including that increased imports must be the result of an unforeseen development. Notwithstanding this, in practice, the DFT has adhered to the obligations under Article XIX of GATT and, in virtually every investigation, has applied the criterion of unforeseen development in safeguard investigations.
In 2019, the AD/CVD Act was amended to incorporate a section on AC law (the AC law), which allowed the DFT to extend the application of existing AD or CVD measures to import products that are involved in circumventing activities. In addition, there are nine relevant sub-regulations that were recently issued to provide the detailed rules and administrative procedures of AC investigations.
In broad terms, the AC law requires that the following criteria must be satisfied:
One of the important elements of the AC law is that AC investigations and measures are applicable only to importers and exporters that are allegedly engaged in AC activities – they do not apply on a country-wide basis.4 However, the application of AC investigations and measures for specific exporters has created two major practical implications as follows:
Treaty framework
Thailand is the founding member of the Association of Southeast Asian Nations (ASEAN) trade bloc, and is a contracting party in 13 other bilateral and multilateral free trade agreements with China, South Korea, Japan, Australia, New Zealand, Chile, Peru and India, among others.
On 15 November 2020, Thailand became a signatory to the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade pact covering 2.2 billion people and 30 per cent of the world’s GDP,5 that built upon the existing multilateral agreements between ASEAN and other nations (the ASEA+1 Agreements). The RCEP will provide further economic integration between the Asian nations, especially the unified rules of origin and accumulation rules that will apply and facilitate the movement of goods across the region, thereby allowing more import products to qualify for the preferential tariffs scheme.
On 9 February 2021, the Thai parliament ratified the accession to the RCEP and Thailand is currently in the process of submitting its ratification to the ASEAN Secretariat.6 The RCEP will not enter into force unless the agreement is ratified by at least six ASEAN Member States and three non-ASEAN states.7
Thailand announced its interest in acceding to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018. A number of committees were established to assess the benefits and impacts of accession to the CPTPP. There has been strong opposition from the public and political parties, particularly with regard to the CPTPP’s requirement to become a member of the International Union for the Protection of New Varieties of Plants (1991).8 The decision on whether Thailand will join the CPTPP has not yet been made.9
Another key element of Thailand’s treaty framework is the free trade agreement between Thailand and the European Union, which has been on hold since 2014. In June 2021, the Thai government announced that it will resume negotiations with the European Union to conclude the free trade agreement.10 In addition, Thailand is negotiating free trade agreements with Turkey and Pakistan, as well as participating in further negotiations for the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation.11
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