Thailand's swine business is at risk from US-China Trade War
Recently, the US Ambassador to Thailand Glyn T. Davies requested the Thai committee through Deputy Prime Minister Somkid Jatusripitak, to make a decision on the fate of American pork in Thailand, putting Thailand into a very challenge position.
The trade war between the United States and China, two largest economies in the world, has resulted in widespread collateral damage to their trade partners including Thailand. The United States has recently put a pressure on Thai government to open its market for American made pork, one of 128 U.S. goods affected by retaliatory tariffs from China.
The additional tariff lead to a 25% decline in U.S. pork price. Thus, the American pork producers are barely break even and being force to find a new market elsewhere.
However, importing U.S. pork to Thailand is not an easy decision to make since the public fears it could lead to public health issue due to the use of such as Ractopamine which has been banned in Thailand and many countries like Japan.
The U.S. trade representative has been urging Thai government to open its pork market since Prime Minister Prayuth Chan-ocha’s trip to Washington in late 2017. The two countries agreed to set up a committee to consider possibility of opening Thai market for U.S. pork.
The working group includes individuals from pig business and government agencies has been set up to consider the impact of the feed addictive on consumers. However, no result has been given yet.
It is expected that the U.S. may use Trade and Investment Framework Agreement Joint Council in Washington D.C. as a forum to negotiate with the representative from Ministry of Commerce. The tariffs on Thai steel and aluminum is likely to be used a bargain to let the Thais loosen control on U.S. pork.
It is going to be a difficult task for the Thai representative to keep a good business deal while maintaining public health as the top priority.
Mr. Grisada Boonrach, Minister to the Ministry of Agriculture and Cooperatives, reaffirmed that Leanness - Enhancing agents are banned in Thailand. He also made a clear statement that the pork from pigs fed with prohibited drugs must not be sell in Thailand.
Beside the health issue, the U.S. pork will worsen the oversupply crisis in Thailand. The country is currently produce 3,000 – 8,000 pigs more than it needed in a day, resulting pork prices to be lower than production cost for over 10 months. The lower price has hit Thai swine raisers and they have to reduce supply and stimulate domestic consumption.
If Thailand lift ban of the pork, it will make a huge impact on almost 200,000 small pig farmers and farmers in related industries such as farm plants, animal feed and animal health products.
It will be a challenging test for Thai government to balance the benefits of every industry and making the most benefit out of this trade war.
