EU Compensates Thailand For EU Expansion ff

The European Union (EU) will provide limited duty-free access to its market for Thai canned tuna, sardines and rice, as part of a compensation agreement stemming from the 2004 enlargement of the union, EU officials said on Thursday.

Under the new tariff arrangement, to be implemented no later than July 1, Thailand may export 1,816 tons of canned tuna annually to the EU market duty-free.

That is in addition to Thailand’s preferential tariff-rate quota of 13,390 tons of canned tuna in the EU at 12 per cent, compared with the EU’s normal tariff of 24 per cent on the product.

The agreement also permits Thailand to export duty-free 1,410 tons of sardines and 1,200 tons of rice annually.

The increases duty-free access was agreed to as compensation for the EU’s inclusion of Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Malta, and Cyprus in May, 2004.

Under World Trade Organization (WTO) rules, the EU must offer compensation for imported items that suffered higher tariff rates after the EU enlargement.

EU sources claimed that Thailand, overall, greatly benefited from the EU enlargement with tariff rates falling in the new member countries by an average of 5 per cent once they adopted EU rates.

”The EU enlargement saw a significant reduction in the level of tariffs for exporters doing business with the 10 new EU members,” said Friedrich Hamburger, who heads the delegation of the European Commission in Bangkok.

In 2004, Thai exports of canned tuna to the EU totaled 49,543 tons, In 2005 Thailand's exports to the EU reached 11.36 billion euro (14.6 billion dollars), while imports amounted to 8.3 billion euro ($10.8 billion).