Thai Competitiveness
in US Markets
Thai Farmers Research Center
September 2000
Table of Contents
page
1.
Introduction
1
2.
Transportation Costs
6
3.
Foreign Exchange
10
4.
Labor Costs
16
5.
Tariffs
23
6.
Cost Analysis
30
7.
Discussion and Recommendations
36
8.
Bibliography
46
9.
Tables
48
9.1
US Imports Market, Market Share
48
9.2
Transportation Costs to the United States
50
9.3
Foreign Exchange Rate Changes Relative
to the Dollar Since 1993
54
Foreign Exchange Rate Changes Relative
to the Baht Since 1993
55
9.5
International Labor Costs by Sector
56
9.6
International Labor Costs as a Percent
of Thai Labor Costs
57
9.7
Tariffs for Important Thai Exports
58
9.8
Market Share for Important Thai Exports
60
9.9
Share of World GDP and Trade
67
9.4
danlewis@tfrc.co.th
1
Thai Competitiveness in US Markets : Introduction
This paper looks at Thai competitiveness in the US market and attempts to determine
why Thailand has had such poor performance. Unlike our neighbors in South East Asia, Thai
exports to the US have actually experienced a small drop in market share since 1992.
Overall, Asia has been losing ground in terms of US share, a fact that has been masked by the
huge increase in US imports overall. However, higher income countries (Japan, and the
NICs) have shown most of the decrease in market share, with middle income countries such
as Thailand mostly showing small increases, and lower income countries such as China and
Vietnam showing stronger growth in market share. Thailand is an exception in our group in
that we have been losing market share. Our poorer performance can partly be explained by
the composition of our exports, with more emphasis on agricultural and labor intensive goods
which compete with lower income countries, and less on electronics and consumer goods.
Asian Market Share of US Imports (%)
0.45
0.40
0.35
0.30
0.25
High Income
0.20
0.15
0.10
Higher Income CountriesJapan
Singapore
Taiwan
Hong Kong
Australia
New Zealand
Brunei
Medium
Income
Medium Income CountriesThailand
Malaysia
Philippines South Korea
Fiji
0.05
Low Income
0.00
1992 1993 1994 1995 1996 1997 1998 1999 2000
Source: USITC Dataweb,
Classification follows World Development Report 1999-2000
Low Income CountriesChina
Indonesia
Vietnam
Cambodia
Burma Papua New Guinea
Although our neighbors in ASEAN have mostly been doing better then us in terms of
market share, our real competition for the US market comes from elsewhere, from the
combined expansion of Chinese and Mexican imports into the US market. These two
countries export many products that compete directly with Thai exports, and that are often
cheaper. In an effort to better understand this competition, the core of this paper takes a
serious look at the factors that determine the cost of Thai products. By looking carefully at
transportation costs, foreign exchange rates, labor costs, and tariffs, we can begin to
understand what in particular is influencing Thailand's lack of competitiveness.
World GDP
The US economy is enormous accounting
for 27 percent of world GDP. The United States is
by far our largest export market, and deserves
special attention. Last year, the US accounted for
21 percent of our exports. Furthermore, the US
share in our total exports has been steadily rising,
increasing our reliance on that market. Exports to
United
States
27%
ROW
59%
Japan
14%
Source: World Development Report 1999/2000
2
the United States are now equal in value to about ten percent of the value of Thai GDP.
The United States is important in another way. As a long term defender of free trade
both in principle and in practice, it is the importer of last resort. It has been instrumental in
instituting many of the trade policies in effect today. The average tariff on imports to the US
is only 2 percent on a trade weighted basis. Nevertheless some sectors are still heavily
protected, and we shall see that trade barriers on textiles and agricultural products to most of
the world, have had a significant effect on import patterns particularly in shifting production
of labor intensive goods to Latin America. These special trade bloc programs of the US are
likely to increase in importance in the short term, further reducing our competitiveness.
The importance of the US market and our lackluster performance therein inspires this
cost-based analysis. It is only by understanding our competitive strengths and weaknesses
that we can ready ourselves for ever increasing competition. As with all our work here at
Thai Farmers Research Center, we have tried to include suggestions and opportunities for
investors and exporters throughout the paper.
The Current Situation
ASEAN-4 Market Share of US Imports
2.50%
2.00%
Market Share
1992
1.50%
Market Share
2000
1.00%
0.50%
Ph
ilip
pi
ne
s
In
do
ne
si
a
ai
la
nd
Th
M
al
a
ys
ia
0.00%
Source: USITC Dataweb Note: these numbers are in terms of value, and are market shares. Falling market
share tells us that imports from Thailand are rising slower than US imports overall. Measuring in value terms
means that as the baht devalues, export levels fall. For the sake of comparison, all of these countries currencies
have experienced similar levels of devaluation since 1992, except Indonesia, which has devalued more.
Relative to our neighbors in ASEAN we are doing poorly, as the only country which
has lost market share since 1992.
The dominant features of US imports has been the fall in market share of Japan and
the ascendance of Mexico and China.
3
Largest Trading Partners - US
Imports
25.00%
20.00%
Market Share
1992
15.00%
10.00%
Market Share
2000
5.00%
na
hi
C
M
ex
ic
o
pa
n
Ja
C
an
ad
a
0.00%
Source: USITC Dataweb
The Asian newly industrialized countries (NICs) as a group have been losing market
share in the US, though incidentally, their market share in world exports have not fallen.
High costs have prompted them to invest in neighboring countries.
NIC Share of US Import Market
5.00%
4.00%
3.00%
Market Share
1992
2.00%
Market Share
2000
1.00%
ga
po
re
H
on
g
Ko
ng
Si
n
Ko
re
a
Ta
iw
an
0.00%
Source: USITC Dataweb
Looking at these charts together we can see several things. Although China and
Mexico are doing very well in terms of market share, they have not yet had a big impact on
ASEAN countries. Market share has grown at the expense of Japan and the higher income
NICs. As those higher income countries have suffered market share losses, they have
invested in other source countries, following in the footsteps of Japan. Critically, unlike in
the late 1980s and early 1990s, much of that investment has gone to other countries,
especially China.
Although ASEAN has not yet been strongly affected by the growing dominance of
Mexico and China, we predict that those countries will soon have a more direct effect on
Thailand. Industries in China and Mexico are growing very rapidly in precisely those exports
4
in which we are doing the best. Therefore it is only a matter of time before they start directly
affecting our own market share. Those predictions will also be borne out in a lter section on
factor cost analysis.
U.S. Imports of Knitted Apparel
3,500
US Million Dollars
3,000
Mexican Dominance
in Apparel
2,500
2,000
1,500
1,000
500
Thai Growth Slow and
Unimpressive
0
1992
1993
1994
1995
Mexico
1996
China
1997
1998
1999
Thailand
Source: USITC Dataweb
The dominant feature of this graph is the astonishing rise in imports of garments from
Mexico, from a very low base in 1992. Mexico has benefited from proximity to the US as
well as low tariffs and an absence of quotas due to its participation in NAFTA. Many
countries (not just the US) have invested in Mexico because of its special privileges under
NAFTA.
5
U.S. Imports of Computer Monitors
1800
US Million Dollars
1600
1400
1200
1000
800
600
Thailand Losing
Competitiveness
400
200
0
1996
1997
Mexico
1998
China
1999
Thailand
Source: USITC Dataweb
In this graph, both Mexico and China are dominating growth in the import market for
computer monitors. China's advantages are low labor costs, and an enormous and dynamic
domestic market that makes FDI attractive. Although Thailand is not yet losing much market
share, if current trends continue, loss of market share is inevitable.
Focus of Study
This series will focus on:
 Macroeconomic Factors - rather than microeconomic factors. The study is broad and it
would be difficult to talk about individual conditions for every product. Nevertheless
numerous specific examples are given.
 Foreign Data - rather than Thai data. There are many studies that start from Thai data
and work outwards. This study does the opposite. US data is comprehensive and freely
available from a variety of sources, many of which are listed in the bibliography.
 Cost-Based Approach - rather than a strategic or marketing approach. This paper tries to
look at the costs involved in producing products rather than the strategies of competing
nations, or the marketing of particular products.
Chapters
Over the coming weeks, the following topics are scheduled to be addressed. Each
chapter is a free standing article, which can be found in its entirety on our English language
website.
Transportation Costs discusses the role transportation costs play in restricting low value
goods in favor of high value goods, and looks at actual transportation costs for many Thai
products. The effect of rising oil prices on transportation costs is also discussed.
6
Foreign Exchange discusses the gradual depreciation of the currencies of many developing
currencies relative to developed countries and the relationship between exchange rate shifts
and export performance.
Labor Costs discusses wage rates by sector for many countries around the world. Labor
costs, although a surprisingly small part of total costs, play a major role in some industries.
Thailand's performance in a number of labor intensive industries is discussed.
Tariffs discusses the three main strands of US trade law: 1) Global free trade, 2) Free Trade
Area for the Americas, and 3) Support for least developed nations, and the tensions that arise
between them. Also covered - typical tariff rates for Thai products, the effects of changes in
trade status for competitors such as China, Caribbean countries, and Vietnam, and non-tariff
barriers.
Cost Analysis divides exports into three broad sectors, and gives predictions for each. Then
it discusses price sensitivity and the effects different shocks would have on price
competitiveness. Finally the different cost factors from this paper are summed together to
give a sense of how we compare to China and Mexico.
Conclusions and Recommendations summarizes findings from this paper, and suggests
some ways to address our competitive situation in the future.
Finally, the Appendix of Tables is an extensive collection of data related to Thai trade with
the US and comparing Thai costs with those of other countries in the world.
7
Thai Competitiveness in US Markets : Transportation
Costs
Transport costs have long played a significant role in determining the flow of imports
and exports. A few centuries ago, spices from South East Asia were sold for exorbitant
prices in Europe, while tea from India was sold for exorbitant prices in China and America.
Spanish galleons carried gold from Latin America, and British brigs carried diamonds from
South Africa. In short, the only goods transported internationally were small, valuable, and
commanded enormous premiums. Since the advent of modern shipping and air freight
transportation costs have diminished in importance, but they still play a significant role in the
flow of trade for some of Thailand's most important exports, especially those of lower unit
value.
With transportation costs, the most important relationship is of the value of the good
relative to the cost of transporting it. So, for example, a valuable good (e.g. frozen shrimp)
may be expensive to ship, but compared to its final value the transportation cost is reasonably
low. Other valuable goods (e.g. hard drives, jewelry) are so cheap to transport that their final
cost is hardly affected by transport costs. Goods that are of low value must be cheap to
transport in order to make it economical to ship them. (Shoes and clothing can be transported
because they require neither speed nor special care. Fresh jackfruit and rose apples are not
transported.) Transportation costs play the least role with goods that are of high value and
easily shipped, and play the largest role with goods that have low value and are expensive to
ship.
Some Goods are More Economical to Transport Than Others
High Transport Cost
Low Transport Cost
Okay
Best
High Value
Cannot Transport
Okay
Low Value
The cost of transport something will depend on how it is transported. When
transporting by water, bulky goods are expensive, since prices often reflect volume rather
than weight. For air transport, weight is the critical factor. When shipping by land, both of
these factors can be important. The speed with which the good must be delivered
(perishability), and any special conditions the good requires (e.g. keep frozen) also have a
large effect on the shipping cost. In terms of competitiveness, generally if a good is
expensive to ship from one country, it is also expensive to ship from another. Advantages
arise only in being closer to the final market. If the good is expensive to transport distance
matters a great deal.
The following table shows actual transport costs for imports to the United States from
a variety of different countries. Values shown are the percent of the value of the good that
must be added for transport costs, and are calculated by taking the difference between custom
value and C.I.F. value in US trade data, and dividing by the custom value. Custom value is
the price paid for the good before shipment to the US. C.I.F. value includes all costs
including insurance and freight of bringing the good to the customs port in the US. Therefore
transportation costs within the US are not included in these numbers. Transportation costs
are averaged for the years 1996-1999.
8
Transportation Costs as a Percent of the Value of the Product of Goods Arriving in the United
States From Several Countries, Average for 1996-1999
Hard
Shrimp
Garments Grain
Jewelry Wooden Cars and Plastics
Drives
incl. Rice
Frames
Parts
HS Code
8471704065
160520130
HS62
HS10
HS71
HS4414
HS87
World
1.0
2.1
4.0
9.2
0.5
4.8
1.8
Thailand
0.5
1.9
5.0
14.2
1.1
5.7
5.3
Mexico
1.0
1.7
0.9
4.2
0.4
1.0
1.1
Canada
0.8
2.2
0.7
6.5
0.1
3.0
0.9
Honduras
---2.2
1.9
----------------Mainland
1.6
3.5
4.7
16.8
4.3
7.4
8.8
China
Philippines
1.0
12.8
5.2
--------7.5
5.6
Malaysia
1.5
----4.7
--------7.1
9.2
Indonesia
----1.8
5.8
----1.9
8.1
6.1
Italy
--------2.8
8.5
0.8
6.6
3.5
India
----6.6
8.5
8.1
0.5
10.7
7.2
Source: United States National Trade Data Base, Dataweb, World Trade Analyzer
In this table, some goods, such as hard drives, shrimp, and jewelry, have low transport
costs that do not influence Thai competitiveness for US markets. In other categories, such as
plastics, grain (rice), wooden articles and garments, there is a clear transportation cost
advantage to being close to the US. There is not a clear distance based relationship here
because of 1) economies of scale, 2) efficiency in ports and airports, and 3) the composition
of goods within a category may vary.
Clearly transportation costs are not prohibitive for any of the above categories, since
they are all important Thai exports, but in terms of long term competitiveness Thailand is at a
disadvantage. The economic benefit of producing these goods close to the United States
might eventually move centers for their production closer to the final market. The location of
other goods, such as electronics and jewelry will be influenced by other factors such as
tariffs, exchange rates, and conditions in the producing countries.
We can look at a more complete list of Thai exports to discover what other goods
might have a long term competitive disadvantage.
HS39
5.1
11.2
1.9
2.4
----8.6
----10.1
11.3
6.5
8.2
9
Thai Products that have Different Levels of Transportation Costs
Low Transport Cost Medium Transport Cost High Transport Cost
2-5%
0-2%
Hard Drives
Monitors
Jewelry
Rubber Gloves
Shrimp
Vehicle Wiring Sets
Integrated Circuits
Fax Machines
Ink Jet Printers
Footwear
VCRs
Tuna
Photocopy Machines
Power Supply Units
Very High Transport
Cost
5-8%
Garments
Wooden Frames
Keyboards
Ceiling Fans
Toys
Microwaves
Rubber
Ceramics
Plastics
Pineapples
Cement
Rice
Speakers
Furniture
9%
11%
15%
42%
14%
12%
10%
Based on US merchandise trade data, NTDB
Some products have already shown a marked tendency to shift towards more local
production. For example, garments imported into the United States are increasingly coming
from a variety of Latin American countries, rather than Asia, although Asia is still the largest
source. Garment exports to the United States from Thailand have increased over the past five
years, and they have also increased from China, but the largest increases have been from
Latin American countries.
US Imports from Several Regions of Articles of Apparel, or Clothing Accessories, Not
Knitted or Crocheted (HS62)
1999
1995
Indian
Subcontinent
12%
ROW
17%
Asia
47%
Latin
America
24%
Indian
Subcontinent
12%
ROW
16%
Asia
42%
Latin
America
30%
Based on US merchandise trade data, NTDB
The transportation sector is strongly sensitive to energy costs. Because of this, Thai
competitiveness in US markets may be decreased if the oil price rises. The following table
gives an idea of the effect on transportation costs of a change in oil price.
10
Effect of Changes in Energy Prices on the Cost of Transportation
Sector
Percent Change in Cost for a 1 percent
Change in Oil Price
Ocean and Coastal Water Transportation
0.306
Road Freight Transport
0.270
Railways
0.183
Air Transport
0.143
Source: TDRI, "The economic impact of the liberalization of the oil market," May 1998.
Based on data from the 1990 Input-Output Table for Thailand, NESDB
We can calculate the effect the recent rise in oil prices might have on Thai
competitiveness via transport costs. The average price of oil (Brent Crude) from 1996 to
1999 was $17.70 dollars a barrel. In the first 10 months of this year, the average price was
$28.80, an increase of 63 percent. Ocean transport costs should therefore rise by
.63 * .306 = .193 or 19.3 percent. Then if transport costs are 10 percent of the value of the
product, the increase in the final cost of the product, due only to transport costs, would be
.10 * .193 = .0193, or 1.93 percent of the price of the good. Unfortunately, goods that
already have high transport costs will show more of an effect than those with low transport
costs.
Effect of Higher Oil Prices on Thai competitiveness Through Transport Costs
Product
Average Transport Cost 1996-1999 Estimated Transport Cost This Year
(percent added to Thai export price) (percent added to Thai export price)
Ceramics
9
10.7
Plastics
11
13.1
Garments
5
6.0
Shrimp
1.9
2.3
Cement
42
50.1
Electronics
1.9
2.1
Source: Thai Farmers Research Center estimates.
Compared to other neighboring countries, such as China, Malaysia, and Indonesia,
Thailand seems to have slightly lower transport costs, category by category. Therefore
higher energy costs might improve our competitiveness vis-à-vis our closest neighbors, but
would surely hurt our competitiveness vis-à-vis the majority of nations that are closer to the
United States.
In summary, although transport costs do not matter as much as they once did,
nevertheless Thailand's distance from the United States still acts to reduce the
competitiveness of many low value, high volume goods. In particular, there is the potential
for transportation costs to preclude long term competitiveness in plastics, in ceramics, in
wooden products, in basic agricultural commodities, and in garments. Some other goods are
not significantly affected by transport costs, such as high value computer parts, shrimp, and
jewelry. To reduce the effect of transport costs on competitiveness, Thailand should
continue to increase the value-added in its exports. Transport costs are only important as a
percentage of the value of a product, and so they diminish in importance as the good becomes
more expensive.
11
Chapter Three Thai Competitiveness in US Markets :
Foreign Exchange
Of all the factors that affect Thailand's exports to America, the exchange rate has the
largest effect on competitiveness. The devaluation in the baht over the last several years has
made Thai goods 40 percent cheaper for Americans (excluding flow-through of goods that
must be first imported into Thailand). In comparison, tariffs and transportation costs may
give only a few percent price advantage. Our exchange rate relative to our competitors
therefore plays a very large role in our international competitiveness.
The exchange rate can be viewed as the price of all our country's goods together. If
we take the analogy of Thailand as a business, if we charge a lower price (weaker exchange
rate), then more people will buy our goods. However, we will receive less money - less to
live on, less to invest in the future, and less to buy the inputs that we need. Also like a
business, if we lower our prices/exchange rate there will be great pressure on our competitors
(once they see the effect on their sales in terms of trade figures) to lower their
prices/exchange rate as well, so that competitive devaluations are likely.
The exchange rate is a price that affects all of the country's exports and imports. Each
good also has its own price. Some goods need to have reduced prices, others are competitive
at existing price levels. Why then doesn't the price of each of the individual goods change
rather than the overall price? One reason is that prices of both goods and factors of
production tend to be sticky. A firm does not wish to decrease the price of the goods it sells.
Even more so, it cannot reduce the wages of the people it employs. The exchange rate
adjusts if other factors cannot.
Often the effect of a devaluation is to reduce the value of Thai labor relative to
imported goods, so that for the Thai producer the labor component of locally produced goods
becomes cheaper relative to the good component. Overseas, Thai goods are cheaper because
in terms of dollars the labor component has become cheaper.
The price that can be charged for Thai goods in the international market depends on
what other competitors are charging. Therefore it is important to know about changes in the
level of our exchange rate relative to that of other countries. If the productivity and price
levels of our competitors are similar to ours ( a big assumption) then our prices will depend
on our relative exchange rates.
We compare exchange rates both to the US dollar, and to the Thai baht. Both are
important. Comparing to the US dollar tells us about the price of imports relative to locally
made goods in the US market. Also, if imports are getting cheaper, probably more of that
kind of good will be demanded. Comparing to the Thai baht tells us how our prices are
relative to our competitors. Many goods will be too expensive to produce in the US so in that
case our prices relative to our competitors is the most important.
The period of comparison is 1993 to 1999, which covers the period just before the
most recent Chinese devaluation, to the present.
Because we are looking only at
competitiveness in the US market we need only look at exchange rates relative to the US
dollar, not to other measures such as the real or nominal effective exchange rate.
12
The Change in Market Share of US General Imports and the Change in Exchange Rates
Relative to the Thai Baht and US Dollar over the Six Years from 1993 to 1999.
Country
Canada
Japan
Mexico
China
Germany
United Kingdom
Taiwan
Korea
France
Italy
Malaysia
Singapore
Thailand
Philippines
Brazil
Venezuela
Ireland
Hong Kong
Israel
Switzerland
Indonesia
Belgium
India
Netherlands
Market Share
Rank 1999
Change in Market
Share
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Constant
Rapid Decline
Strong Growth
Strong Growth
Constant
Constant
Decline
Constant
Constant
Constant
Growth
Decline
Constant
Strong Growth
Decline
Decline
Strong Growth
Rapid Decline
Growth
Constant
Constant
Constant
Growth
Decline
Change in Exchange Rate
Change in Exchange Rate
RELATIVE TO THE THAI BAHT RELATIVE TO THE US DOLLAR
Appreciation
Rapid Appreciation
Rapid Depreciation
Neutral
Rapid Appreciation
Rapid Appreciation
Appreciation
Neutral
Rapid Appreciation
Appreciation
Neutral
Rapid Appreciation
Neutral
Neutral
Depreciation
Rapid Depreciation
Rapid Appreciation
Rapid Appreciation
NA
Rapid Appreciation
Rapid Depreciation
Rapid Appreciation
Neutral
Rapid Appreciation
Depreciation
Neutral
Rapid Depreciation
Rapid Depreciation
Neutral
Neutral
Depreciation
Rapid Depreciation
Neutral
Depreciation
Rapid Depreciation
Neutral
Rapid Depreciation
Rapid Depreciation
Rapid Depreciation
Rapid Depreciation
Neutral
Neutral
NA
Neutral
Rapid Depreciation
Neutral
Depreciation
Depreciation
Based on Information from the US Department of Commerce as reported in USITC Dataweb, Exchange Rates
from US Federal Reserve Bank, and CEIC.
Notes: For Market Share and Exchange Rates - over a six year period, Strong Decline/Rapid Depreciation =
30% or More; Decline/Depreciation = 10 to 30%, Constant/Neutral = -10 to 10%; Growth/Appreciation = 10 to
30%; Rapid Growth/Rapid Appreciation = 30% or More.
This table shows us a number of interesting things.
1) The Thai baht is quite cheap now relative to many other currencies, and should not
face strong devaluation pressures.
2) The US dollar is appreciating in value against many currencies. Actually, it is the
more developed countries' currencies which are appreciating versus the less developed
countries, as currencies of the more economically advanced countries of Asia seem to be
moving together with the US dollar.
3) The more economically advanced countries of East Asia are doing poorly in terms
of market share, even if their absolute level of exports might be rising. If this holds out in
their other export markets, it may put downward pressure on their exchange rates.
4) The strong growth in the region comes from China because of many different kinds
of goods (not especially garments though), and from the Philippines and Malaysia, who are
apparently exporting electronics that were previously provided by the East Asian countries.
13
5) There is a clear relationship between exchange rates and export success.
Generally if a country's currency is depreciating relative to the Thai baht, it has a good
chance of increasing or at least maintaining market share; whereas if a country's currency
appreciates versus the Thai Baht, it has a good chance of losing, or at least just maintaining
market share.
6) The per unit value of US imports is probably falling as the US dollar appreciates
versus many other currencies.
7) If a currency is depreciating, then more exports in terms of volume need to be
shipped just to maintain the same level of exports. Therefore, countries in which strong
growth in market share is matched by rapid depreciation have exceptionally high levels of
export growth in volume terms. (e.g. Mexico) Countries with appreciating currencies may
show export growth in value terms, when volume is constant, perhaps because their exports
are not price sensitive.
How is the exchange rate determined? How much can we control our exchange rate? How
much do we want to control it? The determination of the exchange rate is complicated and is
strongly affected by a number of factors:
Interest Rates Interest rates affect the exchange rate through capital flows. As the interest
rate in Thailand increases relative to the interest rate in other countries, it means that
investors can earn more money in interest if they have their money in Thailand. Having
money in Thailand means having Thai baht. As people buy Thai baht they increase demand
for it and increase its value.
Interest rates also have a large effect on domestic GDP. Most investment is financed
with debt. If the interest rate is low, it encourages people to invest. Therefore policies to
expand the economy through investment often weaken the exchange rate as people move
money overseas to get higher returns on capital.
Inflation and Price Levels Economic theory predicts that arbitrage will act to make price
levels the same in all countries. The law of one price states that absent of transportation
costs and barriers to entry, a good in one country should have the same price as in another. A
looser version of this rule is absolute price parity. The price level in one country will be the
same in every country, even if not for every good. The weakest form, relative price parity, is
which is what is used in practice. Because of differences in labor productivity or the labor
capital ratio, prices may be different from one country to another. However the relative
differences will be maintained over time unless inflation rates are different. Any differences
in inflation rates will be reflected in exchange rates. Therefore countries with high inflation
rates will have depreciating exchange rates.
Future Expectations The value of a currency reflects not only current conditions, but also
expectations about the future. Current demand for currency is a result of the balance of
payments. If the number of people wanting to buy baht is more than the number of people
wanting to sell baht, then the currency will appreciate. If it is perceived that in the future,
fewer people will want to buy baht, that will be factored into the current price of the baht.
Since there is a direct link between the economic health of the country, and the number of
people who want to buy the baht, the exchange rate is tied to expectations of Thailand's future
prospects.
14
Capital Flows Capital flows could be influenced by number of factors including portfolio
investment based on the health of the stock market, foreign direct investment to take
advantage of opportunities or because of low valuations, or a number of other factors
including debt payments to the IMF, payment of private foreign debt, etc.
Currency as an Asset Currency is itself an asset, and one that can pay very high returns if
you can predict what direction an exchange rate will move. The interest per day on 1 million
baht is about 100 baht if kept in the bank. The profit on foreign exchange using 1 million
baht is 250 baht for each satang move in the exchange rate. Enterprises with access to low
spreads, and holding a lot of cash may try to benefit from this market, as evidenced by the
enormous amount of currency that trades hands each day.
All of these factors contribute to making it very difficult to have an active foreign
exchange policy. However, even if we could control the exchange rate, it would probably
not be wise to do so.
Why are the exchange rates of developing countries falling relative to developed countries?
The exchange rate of developing countries may be falling because of competition in
the production of commodities and manufactured goods. As more countries develop stable
macroeconomic policies and use export led growth strategies, there is more competition for
the export markets. A strategy that worked well for some countries has come of age, and
now is less effective when used by all. There is also more competition for FDI.
Manufactured goods are becoming commodities that can be produced in many
locations, and that do not have a lot of profit margin. Low quality manufactured goods are to
developing countries like agricultural commodities were in the 1960s.
There has been enormous excitement about opening the Chinese domestic market, but
the average Chinese does not have the income to buy many manufactured goods, and the
Chinese government does not want the domestic market dominated by foreigners. In order to
get an eventual foothold in this market, many international companies have built exportoriented plants in China to eventually supply local demand. Short-term profitability has not
always been the criteria for investment.
Asian countries have practiced an export strategy based on maximizing market share
rather than profit, which is useful for opening up markets, but is not sustainable in the long
run. The recent recession may have a silver lining in that it cut back investment to Asia,
which will eventually make the surviving companies more profitable.
Currencies are strongly linked to each other, especially within a region. The Thai
baht moves closely in orchestration with other regional currencies. The following table
shows correlations between the baht and some other currencies since 1997.
15
Correlation Coefficients Between the Thai Baht and Other Currencies for the Period 1997 to
June 2000
Currency Correlation 1997-2000
ASIA
1.00
Thailand
0.90
Malaysia
0.88
Korea
0.85
Philippines
0.81
Taiwan
0.80
Singapore
0.72
Indonesia
0.19
Japan
0.03
Hong Kong
-0.80
China
SOUTH ASIA
0.53
India
0.48
Bangladesh
0.44
Pakistan
0.38
Sri Lanka
EUROPE
0.39
Germany
0.34
Turkey
0.16
United Kingdom
SOUTH AMERICA
0.36
Mexico
0.19
Brazil
Based on Monthly Data From CEIC
Several interesting results can be seen in this table. Clearly Thailand's currency is
closely linked with the currency of other countries in the region. The exception is China,
whose currency has slowly been appreciating over the period, probably due to capital
inflows, and Hong Kong, which has a currency which is essentially pegged to the US dollar,
therefore showing little variability.
Currencies from South Asia are also linked to the Thai baht, but to a lesser degree
than East and Southeast Asian currencies. European and South American Currencies also
have positive correlations with the Thai baht.
Correlations are positive with almost all countries, which is to be expected since one
half of the variation should be due to changes in the US market which should affect most
countries in the same way. (i.e. if the US increases interest rates it should cause the US dollar
to appreciate against almost all currencies.)
Why is geography so important with exchange rates? Why should neighboring
countries have similar foreign exchange trends? There are a number of similarities between
neighboring countries that can encourage this, such as similar political and institutional
structures. Trade flows between the countries can mean that as one does well, so does its
neighbors. Significant influences in the region, such as Japan in Asia, or a political conflict
can have an effect on all its neighbors. Finally the perceptions of foreigners who aggregate
the world in certain ways, may play a role in determining exchange rates as well.
16
Suggestions for Thai Exporters
The goods Thailand exports are losing value versus the US dollar. The best remedy
for this is not just increasing the value added of goods, but also to increase the uniqueness of
Thai goods. We need to look for goods that others are not exporting, and we need to build
brands. European goods still do well because they rely on goods that are hard to duplicate antiques, wines and cheeses, and branded fashions. Without brands we cannot build market
power. Thai competitiveness does not necessarily have to be built upon high technology, but
it does need to be based on uniqueness, be it based on brand, unique products, or provided
services.
Furthermore, although it is clear that depreciating currencies increases our
competitiveness, but just as a shop that decreases prices must expect others to do so, we also
have to expect that competitive devaluations will follow. It also may decrease our income to
the point where we cannot expand or compete. It is important to realize that developing
nations are in this together, and as a group of exporters we should try to maintain exchange
rates just as we do with specific commodities, and minimize the effect of competitive
devaluations that have occurred in the past, even if it means fewer exports for each of us.
This needs to be kept in mind when considering the seemingly all important export growth
figures.
Recent history of competitive devaluations:
Year
Event
1994
China devaluation
1995
Mexico/Latin American devaluation
1997/1998
Asian devaluation.
Effect of Flexible versus Fixed Currencies
There is no evidence to suggest that developing countries with flexible exchange rates
have depreciated any less than those with fixed exchange rates. Countries that have flexible
exchange rates have depreciated just as much as ones that didn't, but since the devaluation
occurred over a number of years, it was not so obvious. For instance, all the South Asian
currencies have depreciated as much as the baht over the past 6 years, but more gradually.
17
Chapter Four
Labor Costs
Thai Competitiveness in US Markets :
The price of labor is a direct measure of the wellbeing of the Thai people. When the
World Bank wants to compare the level of development between countries, it looks at per
capita income - so that the higher wages are, the better off we are. However, wage rates can
also be too high to make us competitive internationally. This can lead to a long term decline
in our prosperity.
One of the biggest factors determining our wage competitiveness in the international
market is the exchange rate. The wage rate for traded goods essentially falls and rises with
the exchange rate. Domestic factors are also very important in that wage rates are mostly set
by supply and demand in the domestic market. Supply and demand are in turn influenced by
the domestic demand for goods, the supply and demand of the imports and exports of the
country, demographics, and the productivity of workers in the country.
When measuring wages we can either consider the wages or earnings that the worker
receives (including or not bonuses and fringe benefits), or we can consider the whole cost to
the firm of hiring the worker. Clearly the latter is preferable for comparing competitiveness
between nations, but obtaining data is difficult because that is not the way data is usually
collected. In Thailand, non-wage costs average 30-50 percent of the wage costs, and can
range from very low (<10 percent) for construction workers, to very high (>200 percent) for
some tourism facilities.
The productivity of labor is also very important. In the end, it is the amount of
product that can be produced for a certain total labor cost that is important, not how many
laborers are employed. If it takes 100 workers to cook a pizza, we don't care how cheap each
one is to hire. One well paid worker would be better.
In practice productivity is easy to measure, but difficult to interpret and compare. A
simple measure of productivity is to divide output in an industry by the labor cost. This,
however, does not account for 1) how much capital is used or 2) if business cycles are
keeping workers busier or less busy then usual. Although these factors can be taken into
account, differences in capital quality and different ways of measurement make international
comparisons somewhat suspect. Productivity in Thailand is increasing, but slowly.
Thailand has traditionally been a popular location for foreign investment, in part
because of its cheap labor supply. Leading up to the economic crisis of 1997, the
conventional wisdom was that wage rates had risen to the extent that Thailand was no longer
competitive as a location for labor intensive production. After the crisis and devaluation,
despite a 35-40 percent drop in the effective price of labor, it is still believed that labor costs
are too high to compete in labor intensive industries such as apparel, wood working,
footwear, textiles, leather and rubber goods. Is there truth in this assessment? To help look
at this issue, we will look at manufacturing wages relative to our largest competitors for US
markets.
18
Manufacturing Wage in Some Selected Countries as a Percent of the Thai Manufacturing Wage
Bangladesh
25
Brazil
406
300
Canada
1139
919
54
22
1237
483
146
265
104
747
796
100
478
293
1484
33
250
Bangladesh
India
200
Percent
HongKong
India
Indonesia
Italy
Korea
Malaysia
Mexico
Philippines
Singapore
Spain
Thailand
Taiwan
Turkey
USA
China
150
100
Indonesia
Malaysia
Mexico
Philippines
Thailand
50
China
0
Source: TFRC database. Derived from UNIDO, ILO, CEIC, and US Fed Data.
Note: All countries, Wages in US dollars in 1998
There is quite a range of wage rates, with some countries much cheaper than us, and
some much more expensive. Even the high wage countries are doing well in the world, so we
should not be overly discouraged. Rather we need to think of the things that the high wage
countries produce that we can produce as well. This is NOT just about technology - many of
the exports of these countries are luxury goods, or are scarce for some reason.
Some industries use more labor than others. Clearly an industry that uses a lot of
labor (labor intensive) will be more sensitive to labor costs than one that does not (capital
intensive). Even for labor intensive industries, labor costs are not typically a large part of the
total costs. In labor intensive industries, labor costs are rarely more than 20 percent of total
costs, while the overall percent is 7.2 as the following table shows.
19
Percentage of Labour Cost in Total Cost by Industry, 1998
ISIC Code
Rev.3
361
322
362
332
314
331
323
324
321
356
355
311
354
351
353
300
Sector
LABOR INTENSIVE
Ceramics
Wearing apparel, except footwear
Glass products
Wooden Furniture
Tobacco
Wood products, except furniture
Leather products
Footwear, except rubber or plastic
MIDRANGE
Textiles
Plastic products
Rubber products
Food products
CAPITAL INTENSIVE
Misc. petroleum and coal products
Industrial chemicals
Petroleum refineries
TOTAL MANUFACTURING
Percent
28.8
18.2
17.0
15.2
14.9
14.7
13.4
13.2
10.4
10.4
7.5
5.6
3.4
2.3
0.5
7.2
Source: Employment Survey Report, Ministry of Labour and Social Welfare 1998
One effect of the low share of labor costs in total costs is that wage rate advantages
can be dwarfed compared to some other factors. For example, in the apparel industry, wages
in China are 27 percent of our wages. Their total costs are therefore .27*.182 + 1*(1-.182) =
.867, or 86.7 percent of our costs, a significant cost advantage. The same calculation for food
products in which labor is only 5.6 percent of total costs and Chinese wages are 34 percent of
our wages, gives us .34*.056 + 1*(1-.056) = .958, or 96.3 percent of our costs, which is not
nearly so threatening This cost advantage could be compensated by higher productivity,
lower raw material costs, lower transportation costs, etc. Even the apparel cost advantage
could be overcome by a 15 percent further depreciation of the exchange rate which given all
domestic products, would make our prices cheaper. Unfortunately, this would likely cause
China to depreciate in turn, meaning lower income for all of us, and no change in competitive
advantage!
Our wage rates are considerably cheaper than wage rates in the United States, so that
it is unlikely that we will be competing directly with domestic production. To give a sense of
comparison, the average manufacturing wage in the US is 14.84 times greater than in
Thailand. Even for the sectors where wage rates are most similar, (apparel: 6.81 times,
printing: 7.26 times) US rates are still significantly higher.
Now that we have a sense of general wage levels, it is helpful to see how wages vary
in some important export markets. The following table gives the local wage in dollars, the
market share, and the growth rate for several labor intensive industries that are important
export industries to the United States.
20
US Imports of Electrical and Non-Electrical Equipment
84 Nuclear Reactors, Boilers, Machinery
Total Market Size
165,575
Million US$
Thai Annual Wage
2,874
1998 US Dollars
Country
Wage98
MS99
AGR9699
Japan
1065
19.2%
-8%
Canada
1253
10.3%
-1%
Mexico
172
8.6%
14%
Germany
NA
7.5%
-3%
China (Taiwan)
446
7.2%
-1%
Singapore
678
7.0%
-7%
China
36
6.1%
20%
United Kingdom
1036
5.6%
4%
Malaysia
137
4.6%
13%
Korea, Republic Of
417
4.2%
4%
France
NA
3.1%
3%
Italy
1174
2.6%
-2%
Thailand
100
1.8%
0%
Philippines
106
1.5%
59%
Ireland
NA
1.3%
23%
85 Electrical Machinery And Equipment
Total Market Size
145,901
Million US$
Thai Annual Wage
2,874
1998 US Dollars
Country
Wage98
MS99
AGR9699
Mexico
172
19.8%
8%
Japan
1065
18.1%
-8%
China
36
10.3%
11%
Canada
1253
7.9%
7%
Korea, Republic Of
417
7.8%
-3%
Malaysia
137
6.5%
-7%
China (Taiwan)
446
6.4%
2%
Philippines
106
3.9%
11%
Germany
NA
2.7%
-1%
Thailand
100
2.3%
0%
Singapore
678
2.2%
-12%
United Kingdom
1036
2.0%
-1%
Hong Kong
869
1.4%
-6%
France
NA
1.3%
-2%
Indonesia
20
1.0%
6%
Source: TFRC database. Derived from UNIDO, ILO, CEIC, and US Fed Data.
Notes: Wage98 is the wage as a percent of the Thai wage in the same industry in 1998, MS99 is the market
share of US imports in 1999, and AGR9699 is the average annual growth rate during the 1996-1999 period.
These two categories include an eclectic mix of machinery, computers, and circuits.
Important Thai exports included in these categories are:
HS84: Hard Drives, Monitors, Printers, Keyboards
HS85: IC Circuits, Vehicle Wiring, Fax Machines, Power Supplies, Telephones, VCRs, TVs
Some clear trends are evident in these tables. Countries with wage rates much higher
than Thailand's wages (>400 percent), are generally losing market share, while others (<400
percent) generally are not. The reasons for increases and decreases in market share are
complicated, include many factors besides price, but a general trend away from very high
cost producers is evident. Most of these goods are not produced by countries with cheaper
labor costs than Thailand, so in terms of wages we should be competitive.
The size of both of these markets are growing quickly, so Thailand's 0% change is not
all bad news. We are not competing well, however, if we compare ourselves with Malaysia,
the Philippines ,and China. The first two of these have similar wage structures to our own.
21
US Imports of Apparel and Footwear
61 Articles Of Apparel, Knitted
Total Market Size
23,712 Million US$
Thai Annual Wage
2,835 1998 US Dollars
Country
Wage98
MS99
AGR9599
Mexico
168
14.0%
19%
Hong Kong
660
9.2%
-10%
China
27
8.5%
-4%
Honduras
NA
6.2%
19%
China (Taiwan)
295
4.9%
-11%
Korea, Republic Of
309
4.2%
-1%
El Salvador
NA
3.9%
18%
Dominican Republic
NA
3.8%
3%
Thailand
100
3.4%
0%
Canada
552
3.4%
11%
Philippines
67
3.0%
-6%
Macao
NA
2.7%
-4%
Guatemala
NA
2.2%
21%
Turkey
151
2.2%
-5%
64 Footwear
Total Market Size
Thai Annual Wage
Country
China
Italy
Brazil
Indonesia
Mexico
Spain
Thailand
United Kingdom
Dominican Republic
Korea, Republic Of
Vietnam
China (Taiwan)
India
Portugal
14,068 Million US$
1,787 1998 US Dollars
Wage98
MS99
AGR9699
40
60.0%
6%
1151
8.5%
0%
406
6.8%
-7%
23
5.3%
-8%
306
2.5%
7%
605
2.3%
-6%
100
2.3%
-9%
1238
1.7%
16%
NA
1.7%
-4%
486
1.2%
-27%
NA
1.0%
299%
510
0.8%
-28%
47
0.8%
-1%
NA
0.7%
3%
Source: TFRC database. Derived from UNIDO, ILO, CEIC, and US Fed Data.
Notes: Wage98 is the wage as a percent of the Thai wage in the same industry in 1998, MS99 is the market
share of US imports in 1999, and AGR9599 is the average annual growth rate during the 1995-1999 period.
Imports of apparel are increasingly coming from Latin America. Unfortunately it was
not possible to calculate wage rates for all of the Latin countries, but based on World
Development Report statistics they should not be too different from our wages.
Thailand is again maintaining its share of a growing market, but cannot match the
enormous growth in the Latin American countries. Generally Asian countries are not doing
well in apparel.
The foot wear market is increasingly dominated by China with 60 percent of the
market, and an average growth rate of 6 percent. Italy is not losing market share to China
even though it's wages are almost 30 times the Chinese wage. This shows the strength that
brands can have.
In both of these markets, but especially footwear, a large share of production is by
countries with cheaper wages than us, suggesting that we may not be very wage competitive.
US Imports of Leather Goods and Furniture
42 Articles Of Leather
Total Market Size
6,038 Million US$
Thai Annual Wage
1,522 1998 US Dollars
Country
Wage98
MS99
AGR9699
China
47
49.8%
1%
Italy
1681
6.3%
-3%
Thailand
100
5.8%
6%
Philippines
121
4.9%
6%
Indonesia
21
4.0%
9%
Korea, Republic Of
715
4.0%
-12%
Mexico
265
3.9%
8%
India
56
3.3%
-1%
China (Taiwan)
733
2.8%
-16%
France
NA
2.5%
-2%
Sri Lanka
NA
1.8%
14%
Hong Kong
1659
1.4%
-2%
94 Furniture; Bedding, Cushions
Total Market Size
20,378 Million US$
Thai Annual Wage
1,635 1998 US Dollars
Country
Wage98
MS99
AGR9599
China
36
27.2%
10%
Canada
1318
23.2%
-1%
Mexico
238
16.4%
6%
China (Taiwan)
650
6.3%
-17%
Italy
1580
5.7%
-3%
Malaysia
167
2.4%
-7%
Indonesia
21
2.2%
0%
United Kingdom
1601
1.8%
4%
Germany
NA
1.6%
-3%
Philippines
91
1.5%
-7%
Thailand
100
1.4%
-7%
Japan
1085
1.1%
-12%
Source: TFRC database. Derived from UNIDO, ILO, CEIC, and US Fed Data.
Notes: Wage98 is the wage as a percent of the Thai wage in the same industry in 1998, MS99 is the market
share of US imports in 1999, and AGR9599 is the average annual growth rate during the 1995-1999 period.
22
Leather goods are another industry that China dominates, but Thailand is also doing
well. A very large proportion of leather goods are produced by countries with wages cheaper
than us.
In the furniture market, the market is dominated by several big players, who seem to
be squeezing other players out. Lower wages do not afford protection from this.
General Comments on Charts
Mexico and China are increasingly dominating the US import market, as evidenced
by their presence at the top of almost every list.
Wage and price competitiveness may be enough to compete successfully in a
business, but may not be enough to attract FDI. FDI will likely be drawn to the very best
locations. For example, our apparel prices may not be too high in the world market, but if we
want to build that industry, we have to do it ourselves.
Thailand seems to be at a point in which it is cheap for the production of higher value
manufacturing goods, but does not have sufficient facilities to do so, and is still competitive
in labor intensive goods, but is not very interesting to foreign investors.
There is some evidence that once an industry is located at one location it does not
easily move. Industries that are growing quickly such as electronics suffer when there are
insufficient funds for investment. for electronics, Thailand's problems may depend more on a
lack of capital to invest than any inherent lack of competitiveness.
As with most of the Asian countries, Thailand has done an inadequate job of building
brands and unique products.
Is the wage policy Thailand has adopted appropriate?
One very interesting ILO study by a team of researchers that included Acharn Lae
Dilokvidharat from Chula and Chanin Mephokee from Thammasat came to the following
conclusions:
1) The Thai wage rate is not too high to be competitive - rather it was Thailand's policy of
fixing the baht to a basket of currencies, primarily the dollar, that made our wages
uncompetitive. Since the devaluation, wages have effectively dropped 35-40 percent.
2) Real minimum wages grew an average of 4.1% in the 1990-1996 period.
3) Manufacturing productivity growth in Thailand did not keep up with real wage increases in
the 1990s. Productivity was increasing, but not as quickly as wages. Manufacturing
productivity grew at 3.1% during the 1990-1996 period. (Agricultural productivity grew
much faster.)
4) Minimum wage legislation is very important in Thailand because of the lack of collective
bargaining and the weakness of unions. There is currently no other effective way to set wage
rates.
23
5) Minimum wages have had a stronger effect at the bottom of the wage scale, so that many
who were previously paid poorly, often those with the fewest skills, had their salaries
increased, but the wage increases did not move up the pay scale. Those who were well paid
had significantly smaller pay raises. This has had the effect of compressing the wage scale,
and leaving many people earning near the minimum wage.
6) The compression in the wage scale likely has had an adverse effect on productivity, as
there is little incentive to do well when there is no differentiation by training, experience or
seniority. Bonuses and performance rewards do function in that capacity, but are estimated to
be only about 10 percent of total pay, and are not entirely discretionary.
7) There is insufficient training by companies. It is believed that after training occurs, the
employees will leave for another job. However, the reason they do this is because they now
have higher skills and are worth more. Therefore they should be paid better after training, in
keeping with their benefit to the company, and to keep from moving.
8) Minimum wages in the more rural provinces, are still too high. The rural wage is about
80% of the Bangkok wage. Compliance is low. Low wages do not act as a primary motive
for firms to move to rural areas.
In other studies:
Thai workers work hard. According to a study by the Japan Federation of Employers'
Associations, Thai workers work more hours and more days than in any other of the ASEAN
countries. In the total East and South Asian area, only workers in some of the countries of
the Indian subcontinent work more than Thais.
Training in the workplace is very important A number of studies called for an increase in
training in the workplace as a means to increase productivity. Training in general skills is the
most useful for employees, training in specific work related skills are most useful for
employers. There are clear productivity gains from training, and clear indications that Thai
employees are not well trained. The government already offers some incentive in the form of
tax breaks on training related expenses.
24
Chapter Five
Tariffs
Thai Competitiveness in US Markets :
The United States is often said to be the importer of last resort, even though imports,
at 12 percent of GDP, are relatively small. Out of the twenty largest economies, only four
(India, Japan, Argentina, and Brazil) have smaller shares of imports to GDP. The American
economy is then fairly self sufficient. The reason that America is the exporter of last resort is
because it is so big; at 27 percent of World GDP it dwarfs all other possible importers.
Share of World GDP and World Trade in 1998 for Several Countries
Country
GDP (% of World Total) Trade (% of World Total) Ratio
United States
27.4
15.1 =
0.55
Imports 17.6, Exports 12.6
Japan
14.2
6.2
0.44
Germany
7.4
9.3
1.27
France
5.1
5.5
1.09
United Kingdom
4.4
5.5
1.25
China
3.2
3.0
0.93
India
1.5
0.7
0.48
Indonesia
0.5
0.7
1.48
Thailand
0.5
0.9
1.90
Malaysia
0.3
1.2
4.43
Philippines
0.3
0.6
2.08
Source: Based on data from World Development Report 1999/2000 Note: Trade refers to the sum of
merchandise imports and exports. Ratio refers to Trade Column/GDP Column
The US is thought to be a free trade haven because of its strong defense of free trade
policies, its low tariff rates (about 2 percent weighted by actual imports, and its maintenance
of openness even in the face of large trade deficits with the rest of the world. The average
tariff rate hides some high tariffs and quota systems, with the highest tariffs applied to
agricultural goods and textiles and apparel. When tariffs are high they matter more since the
advantages for countries in free trade zones are much greater.
Trade Policy
The United States is involved in most major international trade forums. In terms of
objectives, US trade policy has three strands:
1) to promote free trade in the world at large,
2) to promote an Americas free trade zone, and
3) to promote trade with the poorest countries.
All of these are actively pursued through separate trade agreements. Also the US uses trade
extensively as a foreign policy tool, both as an incentive to its allies, and as a punishment to
its enemies.
Normal Trade Relations
25
Almost all countries in the world currently enjoy normal trade relations with the
United States. A few (e.g. China, Mongolia, Kyzstirstan) must have normal trade relations
renewed annually. Only five countries do not have normal trade relations with the US:
Vietnam, Laos, Afghanistan, North Korea, and Cuba. A few other countries face separate
trade embargoes (Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria) under the
International Emergency Economic Powers Act. Tariffs for countries that do not have normal
trading relations, at about 40 percent, are almost high enough to be prohibitive.
Global Free Trade or Americas Free Trade?
The US pursues both objectives, but eventually we feel that global free trade will win.
As a strong proponent of the WTO, the US has reduced tariffs across the board. In the few
sectors in which the US still has high tariffs, it has already reduced them for some of its
neighbors to the south. As these low cost countries capture market share from domestic
producers, the US will no longer gain any advantage in restricting entry for other countries.
This implies a short term advantage for Latin American countries and long term free trade.
However, The Location of US Investment is Important.
Trade law is designed to protect not only domestic producers but also national
producers operating abroad. (Think of canned pineapple antidumping laws.) If there were
enough investment by US companies in the Americas, it might provide the incentive to
maintain existing barriers for producers outside the trade group. Actually, US foreign direct
investment in Latin America is only about 18 percent of US FDI, and has been growing
slower than US FDI overall.
US Foreign Direct Investment 1994-1999
Latin America
17.9%
Hong Kong
2.0%
Africa
1.7%
China
1.1%
Indonesia
1.0%
South Korea
0.8%
Middle East
1.0%
Thailand
0.6%
Japan
2.5%
Malaysia
0.5%
Asia Pacific
15.4%
Other
1.0%
Europe
55.4%
Canada
8.6%
Singapore
2.6%
Australia
3.2%
Source: US BEA
Generalized System of Preferences (GSP)
TFRC feels that Thailand will continue to receive GSP privileges, but these will
diminish in importance. The GSP system in America has expired and been reinstated a
number of times, and as a means of supporting the poorest nations, will likely continue to be
a mainstay of American trade policy. After the devaluation, Thailand's per capita income
dropped precipitously, decreasing the chance that it will be dropped from GSP privileges.
However, the GSP will probably diminish in importance as the US focuses on alternative
26
programs that help the Least-Developed countries. These include a special classification
within the GSP for Least-Developed countries, and a new program passed last year for the
support of sub-Saharan nations.
In a review of Thailand's progress under the WTO, it was noted that general GATT
standards were preferred to GSP benefits since GSP benefits could be withdrawn at any time.
GSP benefits can be and often are withdrawn for individual products which are successful.
They can be withdrawn if:
1) a country supplies more than fifty percent of US imports of a certain product
2) the level of imports of a product exceeds a specific dollar amount indexed to the nominal
growth of US GDP since 1984.
3) if it is determined that importation is harmful to domestic industry.
In practice, many of Thailand's top exports that would otherwise be eligible for GSP
benefits have had their benefits revoked.
Top Thai Exports Subject to GSP Benefits in the US
Commodity
Status
Tariff Rate
Gold or Platinum Jewelry Okay
5 percent
Wiring Sets for Vehicles
Revoked 5 percent
Photocopy Machines
Revoked 3.7 percent
Silver Jewelry
Revoked 5 percent
Wooden Painting Frames
Okay
3.9 percent
Ceiling Fans
Okay
3.9 percent
Source: National Trade Data Base, Harmonized Trade Schedule of the US (2000)
It should be noted that China is not currently eligible for GSP benefits. Entry into the WTO
will not automatically give them benefits.
Policy under Bush or Gore
Both George W. Bush and Al Gore are strong supporters of free trade. In general
Asians are more wary of the Democratic Party because of its links to labor, the
environmentalist movement, and its interventionist stance on human rights. However, Al
Gore is thought to have a great deal more experience in foreign relations than George W.
Bush. Both candidates speak Spanish and have ties to Latin America which might bias them
towards regional trade agreements over global ones. It should also be noted that Spanish
speakers make up more than 10 percent of US residents now, which gives them a strong
lobby.
WTO and China
China's normal trade relations were suspended in 1989 because of Tiananmen Square,
but the US congress has each year approved 'temporary' normal trading relations. Despite
the yearly debate, it was always unlikely that the US could impose what would essentially be
prohibitive tariffs on its fourth largest trading partner. It is now clear that normal trade
relations will be permanently reinstated this year to coincide with China's entry into the
WTO.
The direct effect on competition for the US market should be minimal since China has
enjoyed normal trading relations for some time. There could be a significant effect on
27
investment flows, however, as China will have to open its domestic markets significantly.
This could switch investment that would otherwise have gone to South East Asia, and could
lead to more exports to the US. (Note for Investors: Entry into the WTO also allows access to
Thai entrepreneurs who wish to expand into the Chinese market.)
Since 1995, when China threatened Taiwan with missile tests in the Taiwan Strait,
Taiwan has followed a 'Go Slow' policy of investing in Mainland China, restricting
investment in many sectors, especially electronics and hi-tech industries. This may be
partially responsible for China's low market share in some of these markets. In response to
its own and Mainland China's entrance into the WTO, Taiwan plans to relax this plan. This is
likely to increase competition from electronics manufacturers in China, and particularly to
shift Taiwan investment in electronics away from Thailand towards China.
Normal Trade Relations for Vietnam
Vietnam has not had normal trade relations with the US since they fought in the
1970s. It now is likely that Vietnam will be granted normal trading relations next year. This
will probably not have an strong effect on producers in Thailand in the short run (especially
since Vietnamese rice is of low grade), but within five years, Vietnam will be producing
significant amounts of rubber, shrimp and coffee all of which may have a very significant
effect on Thailand's competitiveness. Thai investors should be aware of the opportunities
presented by investing in these sectors in Vietnam.
In general, Thailand's neighbors do not enjoy very good relations with the US (see
Normal Trade Relations above). The exception, surprisingly, is Cambodia, which now
exports as much to the US as does Vietnam. Most of its exports are apparel and textiles. As
a Least-Developed Country it is not subject to quotas under the ATC. Again, this is an
excellent opportunity for Thai investors.
Key Trade Programs
Thailand is affected both by trade laws that do pertain to it, and to those that pertain to
its competitors. Those that do pertain to Thailand in terms of its trade with the US include
WTO and GSP. Those that affect its competitors include NAFTA, CBERA, the ATPA
(Andean Pact), the Israel-US Free Trade Area and other laws to support the Least-Developed
Countries.
North America Free Trade Area (NAFTA) is intended to eventually allow free trade in all
goods between Canada, Mexico, and the United States. By 2004 all barriers should be
eliminated except for a few sensitive agricultural items to be phased out in 2008. This will
and already has had an enormous impact on products which the US protects strongly, such as
agricultural products and textiles and apparel. Average tariffs for textiles are 17.5 percent,
while Mexico pays 6 percent, soon to be zero, and is not subject to quotas.
Caribbean Basin Economic Recovery Act (CBERA): Since 1974 the US has supported
Caribbean and Central American Countries so as to increase political good will towards the
US, to encourage political stability and to reduce immigration to the United States. Recent
additions to the treaty allow for no quotas and Mexico tariff rates for most apparel. Much of
the production in this area is in cooperation with US companies, who ship materials to be
processed, and then re-import them. Because of their connections to US companies, they
have unusual political protection.
28
Andean Trade Pact Area (ATPA): The Andean Pact consist of the Northern South American
countries. They are accorded some but not all of the benefits of the CBERA area. They are
included in the new tariff agreement on apparel
Israel-US Free Trade Area: In it's long standing support of Israel especially vis-à-vis its Arab
neighbors, in 1985 the United States offered free trade or reduced tariffs to many products
from Israel. Thailand competes with Israel mostly in jewelry, in which Israel is the market
leader. For the moment Thailand still receives GSP treatment on gold jewelry, but does not
for silver jewelry. Israel producers do not have to pay the approximately 5 percent tariff for
either type. (Gems enter the US free of duty. In many countries, there is a general rule that
the lower the level of processing, the lower the tariff rate.)
US products typically face the following tariff rates in the US
Sector
Typical Tariff Rates for Thailand (%) Tariffs for some Competitors (%)
Apparel
17.5
6 - Mexico, soon to be zero
Electronics
0
0 - All
Jewelry
5
0 - Israel
Rice
1.4 cents/kilo
0.6 cents/kilo - Mexico
Car Parts
2.5
0 - NAFTA
Steel Parts
2
0 - NAFTA
Tobacco
60 cents/kilo
0 - Caribbean countries
Vehicles
25
0 - Canada
Source: Harmonized Trade Schedule of the United States (2000)
Textiles and Apparel are subject to strict quotas, item by item.
As part of the Agreement on Textiles and Apparel (ATC), which is one of the sections
under the GATT, member countries are still allowed to use quotas to restrict the import of
textiles and apparels. These quotas were initially allowed under bilateral multi-fiber
arrangements (MFAs). Under the original MFAs countries were allotted a quota and a
growth rate. The quota was to increase yearly by the specified growth rate. After the ATC
was passed in 1995, these growth rates were accelerated. All quotas are to be eliminated by
2005 under the agreement, although high tariffs will still be in place. There is also doubt as
to whether the US will actually follow through on the requirements to dismantle tariffs.
Given the competitive position of others, Thai exporters will likely be hurt by eliminating the
quotas.
29
Non-Tariff Barriers
Environmental - In 1996 exports of Thai shrimp were banned because it was claimed that
shrimp were being caught without using turtle exclusion devices on nets. Later overturned.
Health - This year, Hong Kong questioned the safety of Thai fruit, and at one time it
appeared as though much fruit would have to be discarded.
GMO - at the beginning of 2000 one hundred and thirty governments signed the treaty on
Genetically Modified Organisms which permits countries to ban imports of genetically
altered organisms that they consider dangerous to health or environment.
Sweatshops - Activists at the WTO meeting in Seattle protested what they felt to be
exploitation of cheap labor in developing countries via inappropriate working conditions (low
wages, long hours, unhygienic surroundings) .
The answer to all of these barriers for exporters is to be aware of the political and
social conditions in the countries to which they export and prepare themselves for barriers
that might arise before it is too late. One warning sign: If the regulation is already in place
for domestic producers there is a good chance it will be applied to imports as well.
Anti-Dumping
As the WTO reduces tariff protections for US businesses it is likely that the use of
anti-dumping laws will increase. Anti-dumping laws are used because they are legal under
the GATT, generally with the intent of 1) stopping illegal dumping of surplus goods outside
of the main market (a form of price discrimination), and 2) preventing firms from creating
monopoly power in markets by pricing low enough to drive out competitors.
In practice, mostly anti-dumping laws are used to protect domestic industries that are
in trouble. The number of dumping cases in the US is thought to depend largely on exchange
rate movements, the strength of the US economy, and the competitive standing of exports in
the market. A downturn in the US would probably lead to increased use of this unfair
practice.
The best protection for producers is to:
1) Keep prices in line with market prices - don’t decrease prices sharply to speed up market
access. Firms are not allowed to follow the same sorts of strategic pricing strategies that they
might follow at home.
30
2) Keep watch on industry trends in the United States, and be particularly careful if the
domestic industry is weak.
3) Be aware of risk factors.
Risk Factors for Anti-Dumping
Rapid Growth in Market Share
Unusually Low Prices
Devaluation of the Baht
Ill Health of Domestic Industry (for whatever reason)
Economic Downturn in Importing Country
Antidumping cases are fought in the US court system, and can be very expensive.
Anti-dumping laws are clearly biased against foreign firms. In the US, 80 percent of cases
lead to some punitive tariffs, but some of these cases were a result of no response by the
defendant. Not fighting will almost certainly lead to prohibitive tariffs. Clearly the best
strategy is avoidance, perhaps through coordination in information at the industry level.
Incidentally, the anti-dumping claim can be against firms, countries, or groups of countries.
31
Chapter Six
Analysis
Thai Competitiveness in US Markets : Cost
In order to evaluate the costs of Thai products, we first divide Thai exports into three
very broad sectors:



Agricultural and Food Products,
Labor Intensive Products, and
Electronics and Machinery.
Thai exports to the US are broad based, with some products from each group.
Because of Thailand’s extensive arable land, we have more agricultural exports than other
Asian neighbors. We have more labor intensive goods than some of our neighbors in
ASEAN who have become dependent especially on electronics. In terms of our biggest
competitors for US markets, Mexico has more electronics and particularly machinery exports
than Thailand, and of course, China’s exports are heavily weighted towards labor intensive
products.
Exports to the US by Sectors
100%
80%
60%
40%
20%
0%
Agricultural and
Food Products
hi
na
e
Ph xic
ilip o
pi
n
M es
al
ay
si
a
C
Machinery and
Electronics
M
Th
ai
la
nd
Labor Intensive
Source: US National Trade Data Base, Notes: 1999 data; For purposes of this paper exports are divided by:
Agricultural HS01-23, Labor Intensive HS24-83&94-99, Electronic and Machinery HS84-93
Looking at the market share data found in the appendix tables, part 9.8, we can make
some generalizations and formulate some expectations for each of the three sectors.
Agricultural products appear to be doing alright even though they often experience
price volatility. Although there are threats from every corner, Thai products have been
reasonably successful in terms of market share. Success depends on fertile land, low input
prices, and productivity which in Thailand is still low. Threats in the future will come from
other countries with large amounts of arable land, such as Vietnam and some Latin American
countries.
Labor intensive goods have so far been merely maintaining market share. Looking at
market share data shows us that China and Mexico have been expanding extremely quickly.
Because of lower costs, it is likely that our market share for some of these products will be
severely affected in a few years time.
32
The threat from the two countries is different. Chinese labor is virtually unlimited in
quantity, and at current exchange rates receives wages roughly a third of Thai labor. For our
labor costs to be the same as theirs, the Thai baht exchange rate relative to the US dollar,
would have to fall to below 100 baht to the dollar, which is not likely to happen anytime
soon. (However, Indonesian labor is already cheaper than Chinese labor.) Foreign
companies are also very interested in investing in China because of the enormous and fast
growing market. Other countries with similar advantages to China include Indonesia, India
and other countries of the Indian sub-continent, and least-developed countries dotted around
the world.
Unlike China, Mexican labor costs are higher than in Thailand, but they have other
advantages due to lower tariffs, better access to some raw materials and proximity to the US.
The benefits that now are afforded to Mexico will also be offered to other neighboring Latin
American countries due to expansion of trade programs.
Both of these sources of competition are likely to put strong pressure on labor
intensive industries that rely on unskilled labor, and that have low economies of scale. The
market share tables and cost analysis below both support this pessimistic conclusion.
The electronics and machinery sectors have been doing quite well in Thailand in the
last few years. Will they be able to make up for the shortfall in labor intensive exports? In
terms of electronics, Thailand has not been successful relative to its immediate neighbors.
The advantages we have from local content and many small supporting industries in the
automobile industry, are just what we lack in the electronics industry. A wafer plant would
certainly help by reducing the extremely high import content of electronic equipment, but
without the supporting industries it is unlikely the sector will take off.
Policy should be directed at both large ticket items such as chip making capacity, as
well as support for SMEs. It must be acknowledged, however, that we may have missed the
wave for this sector, especially if the electronics industry begins to move en-mass to China.
In that case, further government investment in the sector may be wasted.
The automobile industry does have good potential in Thailand especially because cars
are such a large ticket item that a few exports can have a very significant effect on the
balance of payments. The automobile industry still faces a number of risks and unresolved
questions, in particular:
1) Are we the best place to produce for the region?
2) Will the car industry regionalize?
3) Will the region do well enough to support us?
In terms of exporting to the US, it is unlikely that Thailand will have a significant
role. Our hopes are rather at the level of producing for South East Asia. The US does import
many automobile components but the market for those is well developed and would be
difficult to challenge. For example, Mexico exports more than 25 billion US dollars in car
parts to the US a year, which is worth more than the entire automobile sector in Thailand.
33
Sensitivity Analysis
Which cost factor is the most important in determining competitiveness? We can
estimate how sensitive costs of different products are to economic shocks.
Apparel Cost Sensitivity to Shocks
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
Baht from Change in
40:1 to 41:1 US Tariffs
(if 40%
1989-2004
Foreign
Content)
Oil Price
$25/brl to
$30/brl
Min Wage
up 10 baht
-2.0%
Source: Thai Farmers Research Center estimates
Electronics Cost Sensitivity to Shocks
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
Baht from Change in
40:1 to 41:1 US Tariffs
(if 80%
2000-2004
Foreign
Content)
Oil Price
$25/brl to
$30/brl
Min Wage
up 10 baht
-2.0%
Source: Thai Farmers Research Center estimates
Clearly, of the factors considered, the exchange rate is the most important in
determining our price competitiveness in the US. A one baht change in the exchange rate has
a larger price effect than a 10 baht (6.1%) change in the minimum wage, even for labor
intensive goods. Of course depreciation in the baht often is linked to depreciation in other
currencies, so that if we devalue we may get paid less, with no improvement in
competitiveness.
34
Factor Cost Analysis
What is the overall price level of goods reaching the US from different countries? By
putting together the factor costs we discussed in previous chapters, we can get a sense of the
cost of producing goods in each countries. This will give us a basis for comparing the final
cost to US customers.
We have discussed four cost components:




Transportation Costs
Foreign Exchange
Labor Costs
Tariffs
Transportation costs and tariffs we can add right on top of manufacturing cost. Labor
costs are a part of manufacturing cost, so we set Thailand to be 100 and adjust other countries
by wage rates and by labor intensity. Foreign exchange presents a problem because it is
changes in relative foreign exchange rates that matter. This factor is best addressed through
sensitivity analysis.
There is one very significant cost factor that we cannot consider, which is raw
material costs. Raw materials often make up about 60 percent of the value of a product, so
that a small price advantage can significantly affect manufacturing costs. The below tables
make the assumption that raw material costs are the same for the countries compared.
Therefore for each individual industry we must consider what raw materials are likely to be.
Thai Mfg Cost = 100
Cost of Wooden Frame Exports to the
United States
150.0
100.0
50.0
0.0
Thailand
Manufacturing Cost
China
Transport Costs
Mexico
Tariffs
Source: Thai Farmers Research Center estimates
Wooden picture frames are a typical labor intensive product in which Thailand has
had success. We see that China has the cheapest costs, even though they have to pay both the
highest transportation cost, and the highest tariff (since they are not part of NAFTA and are
not eligible for GSP treatment as is Thailand.)
Thailand is shown to have cheaper costs than Mexico, but more expensive than China.
If raw materials were included, probably Mexican prices would be cheaper, since in Thailand
35
wood must be imported. Currently Mexico has the highest market share in this good,
followed by Thailand and China. China has a very high growth rate and is likely to surpass
Thailand this year.
Thai Mfg Cost = 100
Cost of Apparel Exports to the
United States
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
Thailand
Manufacturing Cost
China
Transport Costs
Mexico
Tariffs
Source: Thai Farmers Research Center estimates
A graph for apparel again shows China with the cheapest costs in spite of high tariffs
and transportation costs. Lower tariffs (soon to be zero percent) and low transportation costs
keep costs cheaper in Mexico than in Thailand. Actually, Mexico has had enormous growth
in this sector and China has not. This is undoubtedly due to the US system of quotas for
textiles and apparel which restricts the growth rate of apparel and textiles by country (and by
product.) This suggests that if the US actually does comply with its commitment to GATT to
abolish quotas (but not tariffs) by 2004, there could be an enormous flow of apparel
production to China.
Thai apparel manufacturers clearly benefit by keeping quotas in place, since we are
far from the price leader. Thai investors should also note that as a "Least-Developed"
country, Cambodia is not subject to export quotas on textiles, and has wages that are cheaper
than those in China. (Laos and Vietnam currently do not enjoy normal trade relations with
the US, but if that eventually occurs (2001?) they will also offer good investment
opportunities)
Finally a graph of electronics also shows China as the cheapest producer, due to low
transportation costs and tariffs for all. (The US has a policy of zero tariffs on all electronic
products.) Because there are no other costs to discuss, labor again makes Chinese products
the cheapest. This sector enjoys economies of scale and is sensitive to skilled labor. At the
present, China does not play a major role in many electronics industries, in part because of a
Taiwanese policy not to invest in that sector in China. However, it is likely that this sector
will grow quickly in the next several years because of low costs, a possible reversal of the
Taiwanese policy, and lots of interest in FDI.
36
Thai Mfg Cost = 100
Cost of Electronic Exports to the
United States
100.0
50.0
0.0
Thailand
Manufacturing Cost
China
Transport Costs
Mexico
Tariffs
Source: Thai Farmers Research Center estimates
Competitiveness
How competitive is Thailand? According to the Global Competitiveness Report,
between 1996 and 1999 Thailand's competitiveness ranking fell from 14th in the world to
30th. This occurred at a time when foreign exchange made Thai prices cheaper, labor costs
became cheaper in world terms again due to foreign exchange, tariffs continue to fall due to
the GATT and transport costs (as of 1999) were very low. Export competitiveness is clearly
not the same as "global competitiveness". What in fact is measured in the Global
Competitiveness Report" is weighted towards a strong financial system, economic integration
with the rest of the world, domestic economic strength, infrastructure, and in the year 2000,
creativity and innovation.
Export competitiveness has less to do with the domestic sector, but there are still
important linkages. If companies are bankrupt or cannot obtain loans they cannot increase
capacity or invest in the latest equipment and technology. At times during the recent crisis,
companies with cash flow problems could not even get money to buy raw materials. If
domestic demand is stagnant, foreign companies are less interested in investing in Thailand,
and crucial linkages are not built to outside markets.
This paper has argued that costs are very important for competitiveness. However, as
noted above, we have just come through a period of falling costs. If all of our prices are
cheaper, why aren’t Thai exports doing better?
 Our prices are down, but so are other's prices - chapter three shows that many developing
countries have depreciating currencies relative to the US dollar.
 Thailand had lost competitiveness before the crisis. What originally led to the economic
crisis was an overvalued exchange rate and a corresponding slowdown in exports.
 Thailand is not the very cheapest location for production - New FDI is going elsewhere.
Our factories may be reasonably competitive in the short run, but new FDI will chase the
very best locations.
 FDI is much more profitable if there is both a domestic and a foreign market. Right now
the Thai domestic market is quite weak.
37


Domestic investors do not have the capital or the right products to capture the world
market. Because of the crisis and corresponding debt overhang, few Thai capitalists have
the resources to expand production into ever changing markets.
Some key exports have a very high import content, meaning prices didn't really decrease.
US Imports Are Slowly Becoming Concentrated Among Fewer Exporting Countries
Concentration Measures
1992
1999
48.2%
50.9%
CR4
65.2%
66.5%
CR8
83.2%
83.9%
CR20
Derived from USITC Dataweb
Notes: CR4 is the sum of the market share of the four largest trading partners in terms of imports, CR8 is the
sum of the market share of the eight largest trading partners, and CR20 is the sum of the market share of the 20
largest trading partners.
Finally it is interesting to note that US imports show a trend of coming from a more
limited group of exporters. This argues against the notion that free trade opens up the world
for all nations, and suggests that the pursuit of free trade may not benefit everyone, only the
most competitive or those with special relationships.
Canada
Japan
Mexico
China
Germany
United Kingdom
Taiwan
Korea
France
Italy
Malaysia
Singapore
Thailand
Philippines
Brazil
Venezuela
Ireland
Hong Kong
Israel
Switzerland
Market
Share
Rank
1992
Market
Share
Rank
1993
Market
Share
Rank
1994
Market
Share
Rank
1995
Market
Share
Rank
1996
Market
Share
Rank
1997
Market
Share
Rank
1998
Market
Share
Rank
1999
1
2
3
5
4
7
6
8
9
10
14
11
17
23
16
15
32
13
25
18
1
2
3
4
5
7
6
8
9
10
12
11
14
23
17
15
31
13
26
18
1
2
3
4
5
7
6
8
9
11
12
10
13
22
15
16
32
14
24
19
1
2
3
4
5
7
6
8
11
12
10
9
13
20
16
15
27
14
25
18
1
2
3
4
5
7
6
8
10
11
12
9
14
19
17
13
27
15
24
20
1
2
3
4
5
6
7
8
9
11
12
10
14
15
17
13
27
16
22
20
1
2
3
4
5
6
7
9
8
10
11
12
13
14
16
18
22
15
20
19
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Source: USITC Dataweb
38
Chapter Seven Thai Competitiveness in US Markets :
Conclusions and Recommendations
The general outlook for exports to the US based on macroeconomics is stable to
weak.
Although Thailand has managed to maintain a stable share of US imports over the last
seven years, (only a small loss in percentage terms) it has done poorly in relation to its
neighbors in ASEAN such as the Philippines, Malaysia and Indonesia, who have all had
significant increases. Thai exports are much more concentrated on labor intensive and
agricultural products then are Philippine or Malaysian exports. These countries have done
well because of growth in the electronics industry.
There has been a general trend for Asian countries with low labor costs to do well in
terms of US market share, while higher labor cost countries including the NICs have been
losing market share. At the current exchange rate Thailand cannot compete in labor intensive
products with lower labor cost countries such as China, Indonesia, and even cheaper
neighbors in South Asia. This has resulted in a steady loss of market share in a number of
different product lines.
US imports of low cost goods are increasingly coming from China and Mexico.
Many Thai exports which have shown success lately, such as wooden frames and leather
products, will inevitably face off against the incredibly expanding exports from China and
Mexico and will likely not be able to continue their present growth rates. Although to date,
most of the growth in China's and Mexico's exports comes at the expense of countries with
still higher labor costs, as those countries bow out of the market, the competition will
increasingly be more direct. Chinese costs are still a lot lower than Thai costs for many
products. Overall, unless Thailand has a special advantage in a product it will likely be
produced elsewhere.
Of great concern is the lack of investment in key growth sectors. Thailand is no
longer the best location (in terms of growth, costs, external markets) for foreign investment.
Meanwhile the need to recapitalize Thai businesses as well as banks restrains domestic
investment, especially due to debt overhangs, and unwillingness to lend by the banks. At the
current exchange rate (42 baht/dollar) Thai companies can be profitable, but many of them
cannot expand. Industries tend to show a great deal of stability. Once a firm is set up and
producing it continues to do so, leading to stable levels of exports. However, as the level of
investment falls, businesses that were established during the boom years will stagnate, and
will lose out in terms of market share.
As the level of investment falls, it also reduces Thailand's ability to adjust to changing
trade patterns. Some sectors require constant changes in technology in order to succeed.
That technology is much more expensive due to the decline in the value of the baht. Other
sectors need investment to take advantage of new opportunities in international trade. For
example, in today’s boom market most electronics firms would be successful, but there is no
money in Thailand to invest in them, and foreigners feel that prospects are better elsewhere.
39
Although China's costs are cheaper than ours, China cannot produce everything.
Foreign exchange markets will ensure that eventually China will specialize in what it does
best. Long term competition in some sectors will likely come from elsewhere.
The biggest potential loser in the next couple of years is the apparel and textile
industries. The advantages that NAFTA have given Mexico in the apparel and textiles sector
are also being offered to Caribbean and Latin American countries reducing an average tariff
rate of 17.5 to about six percent, destined to be zero percent in 2004. Savings on tariffs and
transportation costs, and an absence of quotas has made Mexico preeminent in US imports of
apparel. As other quota-free Latin American countries increase production, they will make
meaningless the era of apparel imports driven by quotas, at least insofar as Thailand is
concerned. Interestingly, our calculations suggest that even with zero tariffs for Latin
American products, Chinese apparel will still be cheaper, so that quota faze outs set to be
completed in 2004 under GATT rules might shift some textiles back to this region, if not to
Thailand. Investors might look at Cambodia which is not limited by quotas and has cheap
labor costs.
Some bright lights in terms of exports include air conditioners, silver jewelry, and some auto
parts.
Agricultural products do not currently experience the same level of risk as labor
intensive goods. Agricultural goods have been reasonably successful in US markets, and
although they will continue to face risks from other agricultural exporters such as Vietnam
and South American countries, many products will remain competitive for a number of years.
Thailand has been successful in the US perhaps more than other regions because its products
are mostly upscale. Building a reputation for quality standards may be useful.
Although the electronic sector has come to dominate the export tables, relative to its
neighbors, Thailand has been an underachiever in this sector. The relative lack of success is
due to little domestic content, insufficient supporting industries, lack of R&D, and a lack of
skilled labor. With support from the government some of these problems could be resolved.
However, the critical factor to watch is whether the electronics industry begins to move
wholesale to China. In that case, government investment in the mostly foreign owned sector
could be wasted.
A better bet is the still growing automobile industry. This sector has the necessary
local content and supporting industries to allow it to succeed. One critical factor is whether
South East Asia will grow rapidly enough to support its own car industry. Potential for
exports to the US will depend on whether exchange rates fall sufficiently to substantially
undercut Mexican production costs.
There has been a long term decline in exchange rates and terms of trade for
developing countries in this decade. The devaluation in Thailand reflects previous
devaluations in other regions and with the increasing emphasis on export-led growth this
downward trend in exchange rates will likely continue. (Average decline since 1992 of about
six percent a year) This will not help our competitiveness as other developing nations will
also devalue.
We can list the following results as stemming from our research:
40
Transportation Costs
 Transportation costs favor the transport of small valuable items over the transport of
heavy cheap items. For many bulky low value items we will never be competitive.
 High oil prices have a strong effect on the competitiveness of heavy products– e.g.
cement, but will have minimal effects on most other products.
 Distance can also be measured in time or in cultural differences which affect FDI.
Foreign Exchange
 Exchange rates are the most significant determinant of price competitiveness.
 For exports, our exchange rate relative to competing nations is probably more important
than our exchange rate relative to the US dollar.
 The currencies of developing countries have been falling versus developed countries for a
number of years.
 Currencies in countries with floating currencies have devalued to a similar extent to those
with fixed exchange rates.
 Although devaluations can make us more price competitive, devaluations by one
competitor inevitably lead to devaluations by others.
 Devaluations make us poorer in terms of the world which will make it more difficult to
finance industrial expansion domestically, and makes domestic consumers poorer.
 As a group, developing countries should work to maintain exchange current rates.
Labor Costs
 Labor costs are generally a small part of total costs at an average of 7 percent for
manufacturing products.
 Because labor costs are small compared to raw material cost, for many industries they
will not be the deciding factor.
 It is unit productivity that is important, not wages per se. If we increase our productivity
we can make the same product with lower labor costs.
 Training can improve productivity and make us more competitive for semiskilled labor
intensive jobs.
 Our labor costs in US dollar terms are about where they were in 1992.
Tariffs
 We find three main strands in US trade policy
- Global Free Trade
41
- Free Trade Area for the Americas (FTAA)
- Aid for Least Developed Countries
 In addition, the US regularly use trade policy as a political tool to punish its enemies and
occasionally to reward its friends.
 There are tensions between the different programs that have bee resolved as follows:
1) Free trade or low tariffs for most goods
2) Protection for a few sectors, while selectively offering free trade in those sectors to
Latin American countries.
3) Reduced tariffs and no quotas to Least Developed Countries.
 Tariff policy towards Latin America is very important for Thailand because of
competition for apparel and some agricultural products.
 The risk of antidumping is probably the most serious threat in terms of tariffs: Warning
signs are a weak domestic industry, rapid rise in imports, and a faltering US economy.
 In terms of non-tariff barriers – any rules that apply to domestic industries will eventually
be applied to foreign companies (e.g. turtle exclusion devices for shrimp were required on
US fishing vessels first)
Cost Analysis
 Raw materials are a very large part of total costs – if they are cheap enough we can
overcome differences in labor costs.
 For manufactured goods we reduce raw material costs by building supporting industries
and through import substitution (increasing local content). We also need to increase
productivity and increase R&D.
 For agricultural products we reduce raw material costs by increasing productivity, and
local production of seeds and other inputs.
Overall Competitiveness
 China and Mexico are increasing market share in many products and will eventually
challenge Thailand's market share in the US.
 China is strong because of low labor costs (33 percent of Thai costs in 1998) and because
of interest in FDI in their enormous dynamic market.
 Mexico has higher manufacturing costs than Thailand but benefits from proximity and
tariff reductions on apparel and agricultural products that the US has carefully guarded.
 There is a significant risk of a crash in export value of labor intensive goods (based on
our costs, expanding world capacity, and the relaxation of some quota restrictions.)
 Our agricultural goods (although experiencing price volatility) are for the moment doing
satisfactorily.
 The electronics industry, although currently strong, can not compare with other electronic
sectors in the region.
42
 Electronic industries depend as much on support for small and medium industries as they
do on a wafer plant.
 If the prices of labor intensive goods fall, they will fall everywhere, not just Thailand.
Price leaders such as China will win.
 A fall in labor intensive exports will most likely to manifest itself in a further fall in the
exchange rates of developing countries vis-a-vis the United States.
 US firms have begun to invest in India.
 Italy competes with Thailand for a surprising number of markets, but at a higher level of
fashion. It might be worth taking a better look at this country.
Recommendations
We can improve our competitiveness by reducing our costs and by increasing demand
for our products. The Thai government already has programs to address most of these.
Lower Costs
1) Better supporting industries – lowers cost through more efficient production
2) More local content – saves on transportation and tariffs, increases control
3) Better training for our workforce to improve productivity
We lower costs in agricultural by:
1) More appropriate use of inputs - (e.g. fertilizer)
2) Better stock and strains - to get better yields
3) Better technology – to get better quality
Build Brands
There is little markup when selling a commodity. To the extent that we can make our
products unique in terms of culture, fashion, style, service, quality we can build our market
power and increase profitability. Europe has done a very good job of building brands and
Asia a rather bad job. We should put Thai advertising expertise to work.
Know our Customers and Competitors
1) Follow industry trends and issues in the US to avoid unexpected threats
2) Perform market research to find out about tastes – especially for consumer oriented
products.
3) Watch competitors to avoid unexpected shocks
Invest In Cheaper Cost Neighbors
One of the long standing traditions in Asia is that when your own costs get too high,
invest in your lower cost neighbors to build the same thing.
43
Look to New Markets
Do not ignore our growing gigantic neighbors – China and India.
More Specific Recommendations
Government Support for Small Enterprises
Many of the sectors that have done well at exporting in the past are a result of FDI
from foreign multinationals. This is not surprising as it is estimated that a full fifty percent of
international trade is between related companies – that is with at least some joint ownership.
Large multinational companies have plenty of expertise at marketing, selling, accounting,
distribution and operations and do not want or need much support from the government in
those areas.
At this moment, FDI is limited and big capital projects are beyond the reach of most
investors. Continuing to build support for small local enterprises is a good alternative. This
should be the era of government support for smaller scale enterprises.
Home grown enterprises can use a great deal of help in some of the business functions
listed above. Indeed the Thai government already helps with many of them. Further help
might be in the form of information and advice about export markets such as is offered by the
Small Business Administration in the US. In addition, there are a number of areas in which
economies of scale might dictate a larger governmental role.
If we consider, for example, the possibility of e-commerce for small enterprises, we
might find that small enterprises could not 1) handle payments using credit cards, 2) write
English language web pages, or 3) distribute products efficiently. All of these services could
be offered by the government, and in fact in one form or another are often offered by
commercial shopping sites in the US. Were the government to handle credit card clearing
and give support for web page design – probably by subcontracting to the many small
internet shops already in existence - it might be possible to have direct selling of products by
quite small enterprises in the US.
Thailand has an internationally renowned advertising industry, but none of it is
addressed to overseas customers. There may be areas in which advertising of Thai products
makes sense. Marketing research is another very expensive enterprise at the individual level,
but one that could pay very high dividends. Government support – perhaps by helping
support Thai business students in the US in exchange for marketing research – might be
useful.
Turning to the private sector, there may be room for marketing cooperatives of small
producers. For example, with the slowdown in South East Asia it is likely that auto parts
manufacturers will have excess capacity. It may be easier to sell those parts in the US under
a uniform brand or through a single marketing cooperative. This would give them the scale
that would allow them to negotiate with big customers in the US.
Food
44
One of our strongest competitive advantages is in the food industry. We could protect
it by building a reputation for strictness in food quality. We could run ads showing Thais
rejecting food leaving Thailand because they don’t meet Thai standards.
Think Seriously about GMOs and Biotechnology
With the potential to be one of the world's premier food exporters, we need to think
seriously about what the role of biotechnology will play in the future. Certainly there is an
enormous potential to increase yields in Thailand. If the way to get increased yields is to
welcome foreign investment and resources in biotechnology then it should be done. More
than this, biotechnology has been widely ignored in Asia, and this is a chance to get in at the
beginning of a technology cycle rather than at the end as with electronics. We have a natural
application in agricultural production. If there will be an opportunity for labor intensive
production, or even land intensive production in the biotechnology sphere, this is the time to
welcome it, before we are again behind the curve. This is not the time to waffle and
speculate about what the negative effects of GMOs might be. The negative effects might be
real, but they should be seriously studied, and ways to avoid risks should be found, just as
they have been in other industries.
There is a strong movement among NGOs to ban or avoid GMOs. There are several
reasons for this including 1) They correctly perceive that there are health and ecological risks
of producing GMO food, and feel that multinationals in their search for profits will ignore
these risks. The answer is to address those risks head-on, and determine which are real and
which are imagined, and respond on a case by case basis. Just as drugs undergo, extensive
testing, so must engineered products. 2) GMOs tend to be used by large agribusiness rather
than by small farmers, challenging a way of life that NGOs would like to protect. It is natural
for increased productivity to come from less use of resources, including labor. Nevertheless,
with adequate government support smaller farmers could use them as well. 3) Thais have a
very strong attachment to land (an irrational attachment when viewed through my American
eyes). So although it is acceptable for multinationals to come and make use of the most
basic factor of production (people), it is not acceptable for them to do the same with land.
The biggest barrier to implementation of agricultural biotechnology is of course trade
barriers by places such as Europe that have reacted to potential risks by not taking any chance
and closing the door. This is bound to change over time as the benefits and safety of
bioengineered products become more obvious. If Thailand were to welcome such products,
however, labeling and very strict control would be required.
Support for Farmers - What Kind?
Thailand puts a lot of resources into supporting farmers every year, almost none of it
addressed towards increasing Thai farmers long term competitiveness. Competition for
agricultural products is quite intense in the world. However, its low cost structure and fertile
land gives Thailand the chance to be competitive in the long run. Being competitive means
recognizing that prices for agricultural products will drop continuously in the future, and that
policies to increase productivity and technology are required to counteract that drop. It is
impossible to shore up the wall of prices in the long run.
Other Marketing Suggestions
45
Isn't there some ritual that goes with Thai food? (And I don't mean sitting on the floor
and putting your food on newspapers.) Thai food is very popular worldwide, yet one problem
is that there is little profit in the food industry supplying Thai restaurants. If there is little
value added in the food perhaps we can make the value added in the accessories, which of
course must come from Thailand.
Thailand is the biggest exporter of shrimp to the US. Although shrimp is viewed by
Americans as a healthy alternative to beef, pork and even chicken, it is about as popular on an
American’s plate as beef is on a Thai plate. Certainly there is a lot of opportunity to promote
the use of shrimp on a regular basis which would directly benefit us.
Ease Immigration Restrictions
Stop the policy of making it hard for poor foreigners to live in Thailand. First and
foremost, many of those foreigners are English teachers. Thailand desperately needs to
improve its level of English if it is to be integrated into the world economy. It is hard to
imagine a group of foreigners that is more useful to Thailand.
Skilled workers are valuable too. Countries are beginning to realize the value of
skilled labor and are easing immigration policies for this category worldwide. The
competition in the future is to attract talented people to your country. A skilled foreigner is
much more likely to create jobs for Thais then to take jobs from them. Lets not be the last to
adopt this coming trend.
International Issues
The rental rate on information and intellectual property is too high and should not be
allowed to be set by market rates in the developed world. The developing world cannot
afford a one price fits all rule on intellectual property. The alternative - ignoring intellectual
property rights - will eventually cut off access to many resources.
FDI is a regional issue, not a Thai issue. We need to work together through ASEAN
to remind investors why they were here in the first place – large markets, hard working
people, well developed business acumen. Stability will be the central issue for the next few
years.
Be aware of China as a neighbor. The Chinese economy appears to be on track for a
number of year of prosperous growth. Although there is little money available for investment
right now, there are certainly opportunities for Thai investors. Tourism could also become a
bigger trade, especially given overt hostility to the Chinese in Indonesia and discrimination in
Malaysia. Thailand would need to do a better job of making itself accessible through Chinese
character signs and Chinese language. Becoming a Chinese wedding center would be
particularly attractive. It may take a few years for Chinese income levels to rise sufficiently.
The Indian Sub-continent is also likely to become much more outward oriented in
coming years as investment starts to come in. This might present opportunities for Thai
manufacturers of equipment, etc.
Support the Web
46
Expertise at using the web, and designing web pages is likely to be an important
supporting industry for many types of businesses in the future. The government should
encourage this expertise, perhaps by hiring people to design web pages as suggested above.
The web will also be the source of much of the new information and business that
comes into Thailand in coming years. Thailand needs to establish the legal, financial and
physical infrastructure that goes with this industry.
Finally, there is the potential for e-commerce. Although the widespread use of ecommerce within Thailand is many years off, it is still the only way a small Thai enterprise
could reach a customer in the US. Given global trends, it may be that e-commerce between
businesses develops more quickly than direct sales to final consumers. If Thai companies are
not prepared for this they may be cut off from their customer base.
Do a Better Job of Selling Thai Culture
We should take a cue from Japan and try to do a better job of selling Thai culture. As
mentioned above, foreigners love Thai food, which is a gateway into further interest in Thai
culture. Creating accessories – perhaps based on historical practices – might work for this
purpose. The world loves snobbery including doing things the “right” way, with the “right”
things.
Thai styles and motifs could also be subtly incorporated into cheap exports of wood
and apparel to make them more fashionable, and to differentiate them.
47
Thai Competitiveness in US Markets : Bibliography
Campbell, D.C., M. Mahmood, A. Marinakis, Chanin Mephokee, Gosah Arya, Lae
Dilokvidharat (1998) Wage Policy and Labour Competitiveness in Thailand, ILO,
unpublished study document
CEIC Data Company, Online data service
Heritage Foundation (2000) "Breaking up a triple play on poor countries", US policy
research, http://www.heritage.org/library/backgrounder/
International Labor Organization, Labor Database, http://laborsta.ilo.org
Lall, Sanjaya (1998) "Thailand's Manufacturing Competitiveness," World Bank ,
Competitiveness and Sustainable Economic Recovery in Thailand, Background Papers for
Conference
Middleton, Jon and Zafiris Tzannatos (1998), "Skills for Competitiveness," World Bank ,
Competitiveness and Sustainable Economic Recovery in Thailand, Background Papers for
Conference
OTEXA Office of Textiles and Apparel, Information about tariff and quotas for textiles in the
US, http://otexa.ita.doc.gov/tarfchrt.html
Reuters, Subscriber data service
Thai Department of Labour Protection and Welfare (1998),
รายงานผลการสารวจดัชนีผลิตภาพแรงงานประจาปี 2541, (Employment Survey Report), Bangkok
Thai Ministry of Commerce (2000)
บทสรุ ปสาหรับผูบ้ ริ หารนโยบายการค้าสิ นค้าเกษตรของสหรัฐอเมริ กาและผลกระทบต่อประเทศไทย,
http://www.moc.go.th/thai/dbe/research/vijai25.html
Thailand Development Research Institute, (1998) "The economic impact of oil market"
Thomas Legislative Information on the Web, US legislation on line, http://thomas.loc.gov,
H.R.454
UNIDO Data, labor costs and productivity by country,
http://www.unido.org/doc.cfm?cfm=/Regions.cfm?area=GLO
US Bureau of Economic Analysis, (Various Years) Foreign Direct Investment Abroad
http://www.bea.doc.gov/bea/di1usd.htm
U.S. Congress, (2000), "Trade and Development Act of 2000", http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=106_cong_bills&docid=f:h434enr.txt.pdf
US Council for International Business, http://www.uscib.org
48
US Department of Customs (2000) Harmonized Trade Schedule of the United States (2000),
comprehensive tariff and HS schedule information, http://www.usitc.gov/taffairs.htm#HTS
US Department of the Treasury, Current import quotas for textiles,
http://www.customs.ustreas.gov/quotas/1999/reports.htm
US Federal Reserve Bank, Historical foreign exchange rates, daily monthly, annual,
http://www.federalreserve.gov/releases/H10/hist/
US International Trade Commission, Information about antidumping, http://www.usitc.gov/
US International Trade Commission Dataweb, Market share by product,
http://dataweb.usitc.gov/
US National Trade Database, Market share by product - subscriber based, http://www.statusa.gov/tradtest.nsf
World Bank (2000) World Development Report 1999/2000, full text on-line at
http://www.worldbank.org/wdr/2000/fullreport.html
World Economic Forum (2000,1999) Global Competitiveness Report, summary at
http://www.weforum.org/
World Trade Analyzer, world trade flows, but a bit out of date,
http://oracle.tradecompass.com/owsbin/oowa/ExpSrv610/dbxwdevkit/xwd_init?wrldcode/sysstart
World Trade Organization, WTO Report on Thailand, (1999)
http://www.wto.org/english/tratop_e/tpr_e/tp122_e.htm
49
Thai Competitiveness in US Markets: Tables
Total Market Share of US General Imports by Country of Some Important Trading Partners
(In Terms of Value)
Source: Derived from USITC Dataweb
Country
Market
Market
Market
Market
Market
Market
Market
Market
Share
Share
Share
Share
Share
Share
Share
Share
1992
1993
1994
1995
1996
1997
1998
1999
Total
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Canada
18.51%
19.11%
19.42%
19.52%
19.78%
19.31%
19.13%
19.35%
Japan
18.27%
18.48%
17.95%
16.62%
14.56%
13.95%
13.35%
12.82%
Mexico
6.61%
6.88%
7.46%
8.30%
9.22%
9.87%
10.36%
10.71%
China
4.83%
5.43%
5.84%
6.13%
6.51%
7.19%
7.79%
7.98%
Germany
5.42%
4.93%
4.78%
4.96%
4.92%
4.95%
5.45%
5.38%
United Kingdom
3.79%
3.74%
3.78%
3.62%
3.65%
3.76%
3.81%
3.82%
Taiwan
4.62%
4.32%
4.02%
3.90%
3.78%
3.75%
3.62%
3.43%
Korea
3.14%
2.95%
2.96%
3.25%
2.86%
2.66%
2.62%
3.05%
France
2.78%
2.63%
2.53%
2.31%
2.35%
2.38%
2.63%
2.53%
Italy
2.31%
2.28%
2.22%
2.22%
2.30%
2.22%
2.30%
2.19%
Malaysia
1.55%
1.82%
2.11%
2.35%
2.25%
2.07%
2.08%
2.09%
Singapore
2.13%
2.20%
2.31%
2.50%
2.57%
2.31%
2.01%
1.77%
Thailand
1.41%
1.47%
1.55%
1.53%
1.43%
1.45%
1.47%
1.40%
Philippines
0.82%
0.84%
0.86%
0.94%
1.03%
1.20%
1.31%
1.21%
Brazil
1.43%
1.29%
1.31%
1.19%
1.11%
1.11%
1.11%
1.10%
Venezuela
1.54%
1.40%
1.26%
1.31%
1.63%
1.55%
1.02%
1.10%
Ireland
0.43%
0.43%
0.44%
0.55%
0.61%
0.67%
0.92%
1.07%
Hong Kong
1.84%
1.65%
1.46%
1.38%
1.25%
1.18%
1.15%
1.03%
Israel
0.72%
0.76%
0.79%
0.77%
0.81%
0.84%
0.94%
0.96%
Switzerland
1.06%
1.03%
0.96%
1.02%
0.98%
0.96%
0.95%
0.94%
Indonesia
0.81%
0.94%
0.98%
1.00%
1.04%
1.06%
1.02%
0.93%
Belgium
0.84%
0.89%
0.96%
0.81%
0.86%
0.91%
0.92%
0.90%
India
0.71%
0.78%
0.80%
0.77%
0.78%
0.84%
0.90%
0.89%
Netherlands
0.99%
0.94%
0.91%
0.86%
0.84%
0.84%
0.83%
0.83%
Saudi Arabia
1.95%
1.33%
1.16%
1.11%
1.11%
1.10%
0.69%
0.80%
Sweden
0.89%
0.78%
0.76%
0.84%
0.90%
0.84%
0.86%
0.79%
Colombia
0.54%
0.52%
0.48%
0.51%
0.54%
0.54%
0.51%
0.61%
Russia
0.09%
0.30%
0.49%
0.54%
0.45%
0.49%
0.63%
0.57%
Australia
0.69%
0.57%
0.48%
0.45%
0.49%
0.53%
0.59%
0.52%
Spain
0.56%
0.52%
0.54%
0.52%
0.54%
0.53%
0.52%
0.49%
Nigeria
0.95%
0.91%
0.67%
0.64%
0.74%
0.73%
0.46%
0.43%
Dominican Rep
0.45%
0.46%
0.47%
0.46%
0.45%
0.50%
0.49%
0.42%
Iraq
0.00%
0.00%
0.00%
0.00%
0.00%
0.03%
0.13%
0.41%
Norway
0.37%
0.33%
0.36%
0.42%
0.49%
0.43%
0.31%
0.40%
Costa Rica
0.27%
0.27%
0.25%
0.25%
0.25%
0.27%
0.30%
0.39%
South Africa
0.32%
0.32%
0.31%
0.30%
0.29%
0.29%
0.33%
0.31%
Chile
0.26%
0.25%
0.27%
0.26%
0.29%
0.26%
0.27%
0.29%
Austria
0.25%
0.24%
0.26%
0.26%
0.28%
0.27%
0.28%
0.28%
Finland
0.22%
0.28%
0.27%
0.31%
0.30%
0.28%
0.28%
0.28%
Denmark
0.31%
0.29%
0.32%
0.26%
0.27%
0.25%
0.26%
0.28%
Honduras
0.15%
0.16%
0.17%
0.19%
0.23%
0.27%
0.28%
0.26%
Turkey
0.21%
0.21%
0.24%
0.24%
0.22%
0.24%
0.28%
0.26%
Argentina
0.24%
0.21%
0.26%
0.24%
0.29%
0.25%
0.25%
0.25%
Angola
0.43%
0.36%
0.31%
0.30%
0.34%
0.32%
0.25%
0.24%
Guatemala
0.20%
0.21%
0.19%
0.21%
0.21%
0.23%
0.23%
0.22%
Peru
0.14%
0.13%
0.13%
0.14%
0.16%
0.20%
0.22%
0.19%
Bangladesh
0.16%
0.15%
0.16%
0.17%
0.17%
0.19%
0.20%
0.19%
Hungary
0.07%
0.07%
0.07%
0.07%
0.09%
0.12%
0.17%
0.18%
50
Algeria
Ecuador
New Zealand
Sri Lanka
Pakistan
El Salvador
Gabon
Kuwait
Portugal
Trin & Tobago
Macao
Poland
Czech Republic
United Arab Em
Jamaica
Aruba
Egypt
Vietnam
Cambodia
Greece
Ukraine
Nicaragua
Romania
Congo (ROC)
Morocco
Brunei
Netherlands Ant
Panama
Cote d'Ivoire
Malta & Gozo
Luxembourg
Iceland
Haiti
Liechtenstein
Slovenia
Qatar
Mauritius
Estonia
Burma (Myanmar)
0.30%
0.25%
0.23%
0.15%
0.16%
0.07%
0.17%
0.05%
0.12%
0.16%
0.14%
0.07%
0.00%
0.15%
0.11%
0.04%
0.08%
0.00%
0.00%
0.07%
0.02%
0.01%
0.02%
0.10%
0.03%
0.01%
0.12%
0.05%
0.04%
0.02%
0.04%
0.03%
0.02%
0.01%
0.02%
0.01%
0.03%
0.00%
0.01%
0.27%
0.24%
0.21%
0.17%
0.15%
0.08%
0.16%
0.31%
0.14%
0.14%
0.12%
0.08%
0.05%
0.13%
0.12%
0.08%
0.11%
0.00%
0.00%
0.06%
0.03%
0.02%
0.01%
0.09%
0.03%
0.01%
0.07%
0.05%
0.03%
0.02%
0.04%
0.04%
0.03%
0.02%
0.04%
0.01%
0.03%
0.00%
0.01%
0.23%
0.26%
0.21%
0.16%
0.15%
0.09%
0.17%
0.22%
0.14%
0.17%
0.12%
0.10%
0.05%
0.07%
0.11%
0.07%
0.08%
0.01%
0.00%
0.07%
0.05%
0.03%
0.03%
0.06%
0.03%
0.01%
0.06%
0.05%
0.03%
0.01%
0.04%
0.04%
0.01%
0.01%
0.04%
0.01%
0.03%
0.00%
0.01%
Source: Derived from USITC Dataweb
0.22%
0.26%
0.20%
0.17%
0.16%
0.11%
0.19%
0.18%
0.14%
0.13%
0.12%
0.09%
0.05%
0.06%
0.11%
0.06%
0.08%
0.03%
0.00%
0.05%
0.05%
0.03%
0.03%
0.03%
0.03%
0.01%
0.04%
0.04%
0.03%
0.02%
0.03%
0.03%
0.02%
0.02%
0.04%
0.01%
0.03%
0.01%
0.01%
0.27%
0.24%
0.18%
0.18%
0.16%
0.14%
0.25%
0.21%
0.13%
0.13%
0.11%
0.08%
0.06%
0.06%
0.11%
0.07%
0.08%
0.04%
0.00%
0.06%
0.06%
0.04%
0.03%
0.04%
0.03%
0.01%
0.08%
0.04%
0.05%
0.03%
0.03%
0.03%
0.02%
0.01%
0.04%
0.02%
0.03%
0.01%
0.01%
0.28%
0.24%
0.18%
0.19%
0.17%
0.15%
0.25%
0.21%
0.13%
0.13%
0.12%
0.08%
0.07%
0.11%
0.08%
0.07%
0.08%
0.04%
0.01%
0.05%
0.05%
0.05%
0.05%
0.05%
0.03%
0.01%
0.07%
0.04%
0.03%
0.03%
0.03%
0.03%
0.02%
0.01%
0.03%
0.02%
0.03%
0.01%
0.01%
0.18%
0.19%
0.18%
0.19%
0.19%
0.16%
0.14%
0.14%
0.14%
0.11%
0.12%
0.09%
0.07%
0.07%
0.08%
0.05%
0.07%
0.06%
0.04%
0.05%
0.06%
0.05%
0.04%
0.03%
0.04%
0.02%
0.03%
0.03%
0.05%
0.04%
0.04%
0.03%
0.03%
0.03%
0.03%
0.02%
0.03%
0.01%
0.02%
0.18%
0.18%
0.17%
0.17%
0.17%
0.16%
0.15%
0.14%
0.13%
0.13%
0.11%
0.08%
0.07%
0.07%
0.07%
0.07%
0.06%
0.06%
0.06%
0.06%
0.05%
0.05%
0.04%
0.04%
0.04%
0.04%
0.04%
0.04%
0.03%
0.03%
0.03%
0.03%
0.03%
0.03%
0.03%
0.03%
0.03%
0.02%
0.02%
51
Transport Costs for Exports of Thailand Imported By the United States
Transportation Cost as a Percent of Value of Each Product, Average 1996-1999
Reference numbers are HS codes. There are 2 lists: HS2 and HS10
Products are listed in order of value in 1999
All commodities
85 Electrical Machinery And Equipment And Parts There
84 Nuclear Reactors, Boilers, Machinery And Mechanica
03 Fish And Crustaceans, Molluscs And Other Aquatic I
61 Articles Of Apparel And Clothing Accessories, Knit
16 Edible Preparations Of Meat, Fish, Crustaceans, Mo
71 Natural Or Cultured Pearls, Precious Or Semiprecio
62 Articles Of Apparel And Clothing Accessories, Not
40 Rubber And Articles Thereof
42 Articles Of Leather; Saddlery And Harness; Travel
64 Footwear, Gaiters And The Like; Parts Of Such Arti
90 Optical, Photographic, Cinematographic, Measuring,
94 Furniture; Bedding, Cushions Etc.; Lamps And Light
95 Toys, Games And Sports Equipment; Parts And Access
20 Preparations Of Vegetables, Fruit, Nuts, Or Other
44 Wood And Articles Of Wood; Wood Charcoal
25 Salt; Sulfur; Earths And Stone; Plastering Materia
73 Articles Of Iron Or Steel
39 Plastics And Articles Thereof
10 Cereals
69 Ceramic Products
99 Special Import Reporting Provisions, Nesoi
98 Special Classification Provisions, Nesoi
63 Made-Up Textile Articles Nesoi; Needlecraft Sets;
52 Cotton, Including Yarns And Woven Fabrics Thereof
76 Aluminum And Articles Thereof
87 Vehicles, Other Than Railway Or Tramway Rolling St
72 Iron And Steel
91 Clocks And Watches And Parts Thereof
55 Manmade Staple Fibers, Including Yarns And Woven F
21 Miscellaneous Edible Preparations
70 Glass And Glassware
96 Miscellaneous Manufactured Articles
27 Mineral Fuels, Mineral Oils And Products Of Their
67 Prepared Feathers And Down And Articles Thereof; A
83 Miscellaneous Articles Of Base Metal
68 Articles Of Stone, Plaster, Cement, Asbestos, Mica
54 Manmade Filaments, Including Yarns And Woven Fabri
74 Copper And Articles Thereof
19 Preparations Of Cereals, Flour, Starch Or Milk; Ba
05 Products Of Animal Origin, Nesoi
48 Paper And Paperboard; Articles Of Paper Pulp, Pape
34 Soap Etc.; Lubricating Products; Waxes, Polishing
23 Residues And Waste From The Food Industries; Prepa
08 Edible Fruit And Nuts; Peel Of Citrus Fruit Or Mel
24 Tobacco And Manufactured Tobacco Substitutes
09 Coffee, Tea, Mate And Spices
49 Printed Books, Newspapers, Pictures And Other Prin
4.0%
2.6%
2.0%
2.8%
5.4%
2.9%
1.2%
4.9%
6.6%
7.2%
4.7%
2.3%
9.5%
7.8%
12.4%
7.6%
39.4%
8.9%
10.5%
14.3%
9.0%
0.0%
1.9%
5.3%
3.4%
5.7%
5.5%
7.3%
3.6%
4.4%
9.2%
11.9%
6.9%
17.1%
9.7%
8.3%
8.3%
5.3%
4.8%
12.0%
6.8%
14.0%
9.2%
7.1%
11.5%
5.4%
5.1%
6.1%
52
92 Musical Instruments; Parts And Accessories Thereof
17 Sugars And Sugar Confectionary
32 Tanning Or Dyeing Extracts; Tannins And Derivative
22 Beverages, Spirits And Vinegar
12 Oil Seeds And Oleaginous Fruits; Miscellaneous Gra
81 Base Metals Nesoi; Cermets; Articles Thereof
82 Tools, Implements, Cutlery, Spoons And Forks, Of B
11 Milling Industry Products; Malt; Starches; Inulin;
65 Headgear And Parts Thereof
57 Carpets And Other Textile Floor Coverings
35 Albuminoidal Substances; Modified Starches; Glues;
59 Impregnated, Coated, Covered Or Laminated Textile
58 Special Woven Fabrics; Tufted Textile Fabrics; Lac
41 Raw Hides And Skins (Other Than Furskins) And Leat
50 Silk, Including Yarns And Woven Fabrics Thereof
66 Umbrellas, Sun Umbrellas, Walking-Sticks, Seat-Sti
33 Essential Oils And Resinoids; Perfumery, Cosmetic
97 Works Of Art, Collectors' Pieces And Antiques
38 Miscellaneous Chemical Products
56 Wadding, Felt And Nonwovens; Special Yarns; Twine,
29 Organic Chemicals
13 Lac; Gums; Resins And Other Vegetable Saps And Ext
06 Live Trees And Other Plants; Bulbs, Roots And The
60 Knitted Or Crocheted Fabrics
18 Cocoa And Cocoa Preparations
07 Edible Vegetables And Certain Roots And Tubers
37 Photographic Or Cinematographic Goods
80 Tin And Articles Thereof
30 Pharmaceutical Products
04 Dairy Produce; Birds' Eggs; Natural Honey; Edible
14 Vegetable Plaiting Materials And Vegetable Product
28 Inorganic Chemicals; Organic Or Inorganic Compound
15 Animal Or Vegetable Fats And Oils And Their Cleava
46 Manufactures Of Straw, Esparto Or Other Plaiting M
36 Explosives; Pyrotechnic Products; Matches; Pyropho
89 Ships, Boats And Floating Structures
88 Aircraft, Spacecraft, And Parts Thereof
86 Railway Or Tramway Locomotives, Rolling Stock, Tra
26 Ores, Slag And Ash
47 Pulp Of Wood Or Other Fibrous Cellulosic Material;
93 Arms And Ammunition; Parts And Accessories Thereof
53 Vegetable Textile Fibers Nesoi; Yarns And Woven Fa
51 Wool And Fine Or Coarse Animal Hair, Including Yar
31 Fertilizers
45 Cork And Articles Of Cork
79 Zinc And Articles Thereof
01 Live Animals
75 Nickel And Articles Thereof
78 Lead And Articles Thereof
43 Furskins And Artificial Fur; Manufactures Thereof
5.4%
11.2%
4.3%
10.3%
3.8%
1.7%
4.5%
22.2%
4.8%
10.0%
11.7%
4.0%
6.6%
3.9%
3.7%
4.7%
6.8%
3.0%
8.7%
11.5%
11.8%
8.7%
41.9%
13.6%
3.2%
10.6%
0.8%
4.3%
5.7%
7.6%
16.6%
16.1%
7.2%
15.7%
16.4%
10.3%
4.8%
14.8%
3.7%
23.0%
4.6%
10.1%
5.5%
14.3%
5.3%
8.0%
17.0%
7.9%
14.8%
15.1%
53
Transportation Costs (Continued)
10 Digit HS codes listed in order of value of exports to the US in 1999
8471704065 Hard Disk Drive Unt, Nesoi, W/Out Extnl Powr Suply
8471603500 Color Cathode-Ray Tube (Crt) Monitors
0306130040 Shrimps And Prawns, Peeled, Frozen
1605201030 Shrimps And Prawns, Prepared Nesoi, Frozen
7113195000 Gold Or Platinum Jewelry, Plt/Cld Or Not, Nesoi
8471606400 Printers, Nesoi, Ink Jet
8542138072 Monolithic Ic, Digital, Silicon,(Mos),(Asic),(Pla)
4015110000 Surgical & Med Glove, Vulcanize Rubber, Nesoi
8544300000 Insulated Wiring Sets For Vehicles Ships Aircraft
8542300065 Monolithic Ic, Operating Frequency <100 Mhz,Analog
8517210000 Facsimile Machines
1604143040 Tunas/Skipjack Nesoi No Oil Airtite Cntr Over 7kg
9009120000 Electrostatic Photocopying Image, Indirect Process
4202128070 Trunks,Suitcases,Vanity Case,Etc,Of Man-Made Fiber
8504406012 Power Suppls Fr Inc Into Adp Mach/Units, 150-500w
7113115000 Slvr Jwlry Etc Val Ov $18 Per Doz Pcs
9999950000 Estimated Imports Of Low Valued Transactions
9403608080 Wooden Furniture, Nesoi
8517110000 Line Telephone Sets With Cordless Handsets
8521106000 Video Cassette & Cartridge Recorder/Players, Color
8542300090 Monolithic Ic, Freq.,<100 Mhg(Analog/Digital)Nesoi
2523290000 Portland Cement, Other Than White Portland Cement
8528121201 Tv Rec,Non-Hi Def,Col,Sngl Pict Tub N/O 34.29cm
8542138051 Mono Ic,Dig,Sil,Mos,Exc Vol(Eeprom) < 80,000 Bits
4202923031 Travel,Sportsbags,Etc,Not Backpacks,Manmade-Fiber
1006309010 Rice, Semi/Wholly Milled, Nesoi, Long Grain
8473305000 Pts & Accessories Of Mach Of Heading Of 8471,Nesoi
8542138060 Mono Ic,Dig,Sil,Mos,Ex Vol,(Eprom) > 900,000 Bits
0306130015 Shrimp/Prawn Shell-On Count Size 67-88 Per Kg Frzn
8473301000 Prts Of Adp Mch, Not Incrprtng Crt,Prt Crct Assem.
6105100010 Men'S Shirts Of Cotton, Knit
8471602000 Keyboard Units
4414000000 Wooden Frames Paintings, Photographs, Mirrors, Etc
8414510030 Ceiling Fans,Perm Inst,Slf-Cont Elec Mtr < 125w
6111206020 Babies' Grmnts & Clthng Access Sets Of Cotton,Knit
8471704035 Floppy Disk Drive Unt, Nesoi, W/Out Extrnl Pow Spy
8528123235 Tv Rec,Non-Hi,Col,Sing Tube,Non-Proj,Disp Ex 45-50
7615193000 Aluminum Cooking & Kitchen Ware Enameled Not Cast
2008200090 Pineapples, Prepared Or Preserved, Nesoi
8528122800 Recp App Fr Tv,No-Hi,Col,Sing Pct Tube,Disp >35.56
7103910020 Sapphires Cut But Not Set For Jewelry
8528122025 Tv Rec,Non-Hi,Col,Sin Pct Tube,Non-Proj, > 26 Cm
6403999030 Ftwr S R/P U-L Exc Pgskn V>2.50pr Tenis Women Miss
0306130012 Shrimp/Prawn Shell-On Count Size 56-66 Per Kg Frzn
9503900045 Toys And Models, Nesoi
8529901300 Prnt Cir Assem,Othr Than Tuner,Pc Brd Or Tv, Nesoi
8471605760 Dot Matrix Printer Units W/ Cntrl & Prt Mechanism
6111206040 Babies' Ot Grmnts & Clothing Access Of Cotton,Knit
8542138057 Mono Ic,Dig,Sil,Mos,Exc Vol,(Eeprom) >900,000 Bits
8516500030 Microwave Ovens Having Capacity <=22.5 Liters
8518220000 Multiple Loudspeakers,Mounted In Same Enclosure
0.5%
2.7%
2.0%
1.8%
0.7%
1.7%
1.1%
4.3%
4.0%
1.0%
2.7%
4.5%
1.3%
9.1%
2.6%
2.2%
0.0%
10.3%
3.0%
0.9%
1.0%
41.6%
3.9%
1.3%
8.6%
14.1%
2.0%
1.1%
2.3%
1.8%
4.7%
5.2%
5.7%
5.7%
6.9%
1.1%
4.7%
5.2%
15.0%
2.6%
0.7%
5.9%
4.2%
2.1%
5.8%
2.9%
4.0%
5.7%
1.5%
6.7%
12.4%
54
6201933000 M/B Garments Water Resistant; Mmf, Not Knit
8517198080 Multiline Telephones Incl Key, Call Director
7103910010 Rubies Cut But Not Set For Jewelry
8527214040 Motr Veh Radio-Comb(Inc Optical Disc)Playes,Record
6110102030 Women'S Sweaters Of Other Wool Or Fah, Knit
0306130009 Shrimp/Prawn Shell-On Count Size 46-55 Per Kg Frzn
7323930030 Cooking Ware Of Stainless Steel, And Parts Thereof
6107110010 Men'S Underpants And Briefs, Of Cotton, Knit
2523100000 Cement Clinkers
8516500090 Microwave Ovens Having Capacity >31.0 Liters
4001210030 Natural Rubber In Smoked Sheets, Grade 3
8519990045 Optical Disc (Incluiding Compact Disc) Players
4001220025 Technically Specified Natural Rubber, Grade 20
8534000020 Printed Circuits Of Plastic/Glass =>3 Layers, Cndt
6110202075 W/G Other Apparel Of Cotton, Knit
8708915000 Radiators For Vehicles, Nesoi
8542138058 Mono Ic,Dig,Sil,Mos,Ex Vol,(Eprom) N/O 80,000 Bits
8525408085 Still Image Video Camera,Vdeo Camera Recordr,Nesoi
1605102040 Crabmeat, Prepared, Nesoi, In Airtight Containers
8527211015 Motor Vehicle Radio-Tape Players, Cassette, Stereo
7113112000 Slvr Jwlr Etc Nt Ov $18 Per Doz Pcs Or Pts
6403996040 Ftwr Sol R/P Up Lthr Exc Pigskin Tenis-Gym Shoe Me
6110202065 M/B Other Apparel Of Cotton, Knit
8415100040 Air-Conditioners,Wind/Wall,Self-Contain <2.93kw/Hr
6204624020 Women'S Trousers & Breeches Other Cotton, Not Knit
8542138066 Mono Ic,Dig,Sil,Mos(Asic)&(Pla)Microproces 8bits&<
6111206010 Babies' Sunsuits & Similar Apparel Of Cotton, Knit
0306130006 Shrimp/Prawn Shell-On Count Size 33-45 Per Kg Frzn
1604143020 Tuna, Albacore, No Oil Airtight Cntnr Ov 7kg Nesoi
1604144000 Tunas/Skipjack No Oil, No Airtite Cntr, Over 6.8kg
8528121600 Tv Rec,Non-Hi Def,Col,Singl Pict Tub Diag >33.02cm
9401696010 Hshld Seat W Wooden Frame For Chrs, Exc Uphl Nesoi
0306130018 Shrimp/Prawn Shell-On Count Size 89-110 Per Kg Frz
9018907570 Pts & Accessories Of Dialysis Inst & Apparatus
6212109020 Bras Not Containing Lace Net Or Embroidery Mmf
8528122420 Tv Rec,Non-Hi Def,Col,Sing Pt Tub,Non-Pro, Ov33.02
8471801000 Control Or Adapter Units For Adp Machines
4001210050 Natural Rubber In Smoked Sheets, Nesoi
8504406007 Powr Suppls Fr Inc Into Adp Mach/Units, 50w - 150w
7103991000 Gemstones, Nesoi, Cut But Not Set Suitbl Fr Jewlry
8516500060 Microwave Ovens Having Capacity >22.5l <=31.0l
8525203025 Radio Transcievers, Hand-Held, Freq >400 Mhz
8504408500 Static Converters For Telecommunication Apparatus
6202934500 W/G Garm Desgn Rnwr Mmf <36% Wgt W/Fah N Kt Or Crc
6110303055 W/G Other Sweaters Of Other Manmade Fibers, Knit
4419008000 Tableware And Kitchenware, Of Wood, Nesoi
2009404040 Pineapple Juice, Unfermented, Nesoi, Not Frozen
4202126000 Trunks,Suitcases,Etc,Veg Fiber,Not Pile,Nesoi
2008921040 Fruit/Nut/Plant Mxtrs Canned No Apricot Citrus Etc
4.2%
3.1%
0.5%
0.5%
5.2%
2.2%
4.8%
5.3%
45.2%
6.9%
5.7%
1.1%
8.3%
4.5%
4.7%
3.8%
0.9%
1.7%
2.8%
0.9%
2.7%
4.7%
4.7%
6.0%
6.2%
1.2%
5.3%
2.0%
2.7%
4.3%
1.7%
11.3%
2.4%
3.7%
4.0%
2.5%
2.5%
4.0%
3.4%
1.2%
6.3%
2.4%
12.9%
4.3%
5.6%
10.8%
9.5%
9.9%
13.1%
Source: US National Trade Data Base. Numbers represent the percent difference between
custom or declared value (FOB) and the price actually paid when collected at the port of
entry into the USA (CIF). Shipping costs within the US are not included.
55
Appreciation or Depreciation of Currencies Relative to the US Dollar since 1993
COUNTRY
1993
1994
1995
1996
1997
1998
1999
AUSTRALIA
0.0%
-7.1%
-8.2%
-13.1%
-8.6%
8.1%
5.3%
AUSTRIA
0.0%
2.0%
15.5%
9.9%
-4.6%
-6.0%
-9.9%
BELGIUM
0.0%
3.5%
17.3%
11.7%
-3.4%
-4.8%
-8.7%
BRAZIL
0.0%
-8.8%
-15.0%
-21.1%
-49.7%
CANADA
0.0%
-5.6%
-6.0%
-5.4%
-6.8%
-13.0%
-13.2%
CHINA,P.R.
0.0%
-33.1%
-30.9%
-30.7%
-30.5%
-30.4%
-30.2%
DENMARK
0.0%
2.0%
15.8%
11.8%
-1.9%
-3.2%
-7.2%
FINLAND
0.0%
9.4%
30.8%
24.6%
10.2%
7.1%
2.6%
FRANCE
0.0%
2.2%
13.6%
10.8%
-3.0%
-3.9%
-8.0%
GERMANY
0.0%
2.0%
15.5%
9.9%
-4.6%
-6.0%
-9.9%
GREECE
0.0%
-5.3%
-0.9%
-4.6%
-16.0%
-22.3%
-25.0%
HONG KONG
0.0%
0.1%
0.0%
0.0%
-0.1%
-0.1%
-0.3%
INDIA
0.0%
-0.3%
-3.5%
-11.9%
-13.9%
-24.3%
-27.4%
INDONESIA
0.0%
-3.5%
-7.3%
-11.0%
-29.2%
-78.8%
-73.2%
IRELAND
0.0%
-2.2%
-8.7%
-8.4%
-3.4%
2.8%
8.3%
ITALY
0.0%
-2.4%
-3.4%
2.0%
-7.7%
-9.4%
-13.4%
JAPAN
0.0%
8.7%
18.2%
2.1%
-8.2%
-15.2%
-2.3%
MALAYSIA
0.0%
-1.9%
2.7%
2.3%
-8.6%
-34.4%
-32.3%
MEXICO
0.0%
-7.7%
-51.5%
-58.9%
-60.5%
-65.9%
-67.3%
NETHERLANDS
0.0%
2.2%
15.8%
10.2%
-4.8%
-6.3%
-10.2%
NEW ZEALAND
0.0%
-8.8%
-17.5%
-21.3%
-18.3%
1.0%
2.2%
NORWAY
0.0%
0.6%
12.1%
9.9%
0.2%
-6.0%
-9.0%
PORTUGAL
0.0%
-2.9%
7.5%
4.4%
-8.2%
-10.6%
-14.4%
PAKISTAN
0.0%
-7.5%
-11.2%
-22.2%
-31.4%
-37.4%
-43.1%
PHILIPPINES
0.0%
3.5%
5.6%
3.9%
-9.4%
-33.3%
-30.6%
SINGAPORE
0.0%
5.8%
14.0%
14.6%
8.8%
-3.4%
-4.7%
SOUTH AFRICA
0.0%
-7.9%
-9.8%
-23.9%
-29.0%
-40.9%
-46.5%
SOUTH KOREA
0.0%
-0.1%
4.3%
0.1%
-15.0%
-42.5%
-32.3%
SPAIN
0.0%
-4.8%
2.3%
0.6%
-13.0%
-14.7%
-18.4%
SRI LANKA
0.0%
-2.0%
-5.6%
-12.8%
-18.3%
-25.8%
-32.0%
SWEDEN
0.0%
1.0%
9.2%
16.2%
2.0%
-2.0%
-5.8%
SWITZERLAND
0.0%
8.2%
25.1%
19.6%
1.8%
1.9%
-1.8%
TAIWAN
0.0%
-0.2%
-0.3%
-3.8%
-8.2%
-21.3%
-18.3%
THAILAND
0.0%
0.7%
1.7%
-0.1%
-18.5%
-38.6%
-33.1%
UNITED KINGDOM
0.0%
-2.0%
-4.9%
-3.8%
-8.3%
-9.4%
-7.1%
VENEZUELA
0.0%
-58.1%
-64.2%
-68.1%
-71.2%
Notes: EU members' currencies for 1999 are brought forward by using the Euro rate times the
original conversion rate as of Jan 1, 1999. Venezuela and Brazil are relative to the dollar in 1995.
Source: TFRC, derived from CEIC, and US Federal Reserve Data
56
Appreciation or Depreciation of Currencies Relative to the Thai Baht Since 1993
COUNTRY
1993
1994
1995
1996
1997
1998
1999
AUSTRALIA
0.0%
-7.7%
-9.7%
-13.1%
12.1%
76.0%
57.6%
AUSTRIA
0.0%
1.3%
13.6%
10.0%
17.0%
53.1%
34.8%
BELGIUM
0.0%
2.8%
15.4%
11.8%
18.4%
55.1%
36.6%
BRAZIL
0.0%
-7.2%
6.0%
30.7%
-23.5%
CANADA
0.0%
-6.2%
-7.5%
-5.3%
14.3%
41.6%
29.9%
CHINA,P.R.
0.0%
-33.6%
-32.1%
-30.6%
-14.8%
13.4%
4.4%
DENMARK
0.0%
1.4%
13.9%
11.9%
20.4%
57.6%
38.8%
FINLAND
0.0%
8.6%
28.7%
24.7%
35.2%
74.4%
53.4%
FRANCE
0.0%
1.5%
11.8%
10.9%
19.0%
56.5%
37.6%
GERMANY
0.0%
1.3%
13.7%
10.1%
17.0%
53.1%
34.8%
GREECE
0.0%
-5.9%
-2.5%
-4.5%
3.1%
26.5%
12.1%
HONG KONG
0.0%
-0.6%
-1.6%
0.1%
22.5%
62.6%
49.1%
INDIA
0.0%
-1.0%
-5.0%
-11.8%
5.6%
23.2%
8.5%
INDONESIA
0.0%
-4.1%
-8.8%
-10.9%
-13.2%
-65.5%
-60.0%
IRELAND
0.0%
-2.8%
-10.1%
-8.3%
18.5%
67.4%
61.9%
ITALY
0.0%
-3.0%
-5.0%
2.1%
13.3%
47.6%
29.5%
JAPAN
0.0%
8.0%
16.3%
2.2%
12.5%
38.1%
46.1%
MALAYSIA
0.0%
-2.6%
1.0%
2.4%
12.1%
6.8%
1.3%
MEXICO
0.0%
-8.4%
-52.3%
-58.9%
-51.6%
-44.4%
-51.1%
NETHERLANDS
0.0%
1.5%
14.0%
10.3%
16.7%
52.6%
34.4%
NEW ZEALAND
0.0%
-9.4%
-18.9%
-21.2%
0.2%
64.5%
52.9%
NORWAY
0.0%
0.0%
10.3%
10.0%
22.9%
53.1%
36.0%
PORTUGAL
0.0%
-3.6%
5.7%
4.5%
12.6%
45.6%
28.0%
PAKISTAN
0.0%
-8.2%
-12.6%
-22.1%
-15.9%
1.9%
-14.9%
PHILIPPINES
0.0%
2.8%
3.9%
4.0%
11.2%
8.7%
3.8%
SINGAPORE
0.0%
5.1%
12.2%
14.7%
33.4%
57.4%
42.6%
SOUTH AFRICA
0.0%
-8.5%
-11.3%
-23.8%
-12.9%
-3.8%
-20.0%
SOUTH KOREA
0.0%
-0.8%
2.6%
0.2%
4.3%
-6.3%
1.3%
SPAIN
0.0%
-5.4%
0.6%
0.7%
6.7%
39.0%
22.1%
SRI LANKA
0.0%
-2.6%
-7.1%
-12.7%
0.2%
20.8%
1.7%
SWEDEN
0.0%
0.3%
7.4%
16.3%
25.1%
59.7%
40.9%
SWITZERLAND
0.0%
7.4%
23.1%
19.7%
24.9%
66.0%
46.9%
TAIWAN
0.0%
-0.9%
-1.9%
-3.7%
12.6%
28.3%
22.2%
THAILAND
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
UNITED KINGDOM
0.0%
-2.6%
-6.4%
-3.7%
12.5%
47.6%
38.9%
VENEZUELA
0.0%
-57.4%
-55.4%
-47.2%
-56.2%
Notes: EU members' currencies for 1999 are brought forward by using the Euro rate times the
original conversion rate as of Jan 1, 1999. Venezuela and Brazil are relative to the baht in 1995.
Source: TFRC, derived from CEIC, and US Federal Reserve Data
57
1998 Wages and Salaries per Employee by Sector, in US dollars
Year
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
UNIDO Data from Year
1992
1995
1998
1994
1998
1998
1997
1994
1998
1997
1998
1998
1997
1998
1998
1994
1996
1998
1998
1998
canada
china
hongkong
india
indonesia
italy
japan
korea
malaysia
mexico
1392
564
32145
25883
12549
3790
6881
2706
19404
20698
2599
12423
bangladesh brazil
philippines singapore
spain
thailand taiwan turkey
uk
usa
7611
30742
38582
TOTAL MANUFACTURING(300)
649
10544
29593
851
23887
Food products(311)
693
6411
25164
706
21965
863
NA
34327
16403
10027
3319
5343
2585
17874
16960
2057
12004
7128
26105
27394
Beverages(313)
925
8952
34471
707
32008
1148
420
40915
26139
12994
5340
5288
4484
25083
28232
2364
15701
9337
34306
37623
Tobacco(314)
316
14078
39133
1291
37608
336
308
24186
57998
21087
2291
11547
2781
NA
30202
3574
21153
10567
68649
51980
Textiles(321)
643
7046
27326
700
21767
1168
NA
26809
13827
10137
3315
5647
2083
15066
14766
2262
10636
5497
23149
26210
Wearing apparel,except footwear(322)
383
NA
15642
766
18713
700
355
20543
9727
8757
2599
4755
1891
11093
11790
2835
8350
4267
17197
19310
Leather products(323)
654
NA
19648
717
25254
845
324
25581
11140
10882
2696
NA
1837
14118
15521
1522
11156
4715
21615
27571
Footwear,except rubber or plastic(324)
1533
NA
16442
717
13924
832
402
20571
13460
8688
2891
5465
1352
15681
10818
1787
9109
4322
22118
22876
Wood products,except furniture(331)
466
5056
27899
543
21814
547
NA
25756
9632
11333
2257
3447
1575
14724
13449
1785
9156
4824
22391
24567
Furniture,except metal(332)
526
5589
21538
594
21601
777
335
25834
17734
11079
2730
3887
1495
13806
14760
1635
10628
4476
26162
23580
Paper and products(341)
1631
11835
33718
664
24506
1442
623
33881
24582
12741
3756
6494
2869
19650
23856
3920
12465
9830
31359
40295
Printing and publishing(342)
827
14255
26363
696
30484
2089
NA
43471
27991
12265
4759
7994
2739
22582
22402
4413
14211
7527
35472
32062
Industrial chemicals(351)
1693
NA
42921
NA
2437
NA
40599
45003
17378
8748
8138
4387
32895
32292
4657
18721
14038
42813
51222
Other chemicals(352)
1384
NA
30947
843
NA
1539
800
45331
39513
13413
5387
10938
6824
33723
30114
3940
13387
13951
37213
44266
Petroleum refineries(353)
4869
NA
41281
1176
NA
4786
1433
NA
55977
NA
11829
NA
16813
NA
43097
15016
28511
20983
42895
62503
Misc. petroleum and coal products(354)
707
NA
35110
1302
NA
1667
370
NA
11459
NA
7573
9201
2833
NA
NA
3032
20418
14729
19176
41093
Rubber products(355)
544
11904
33344
824
22146
1466
NA
33815
29920
13408
3808
9020
2757
17874
28121
2044
10901
12708
30193
34065
Plastic products(356)
817
8507
21731
1530
22368
1100
382
30649
20686
11055
3435
5169
2333
15227
20233
2029
11637
6399
26099
29411
Pottery,china,earthenware(361)
486
NA
17636
796
12088
1254
507
29316
24573
9695
3248
6103
2336
NA
19394
1617
11221
8946
23439
27509
Glass and products(362)
1027
NA
28770
796
30157
1378
596
34031
33253
14826
4099
9489
3738
NA
22701
4328
11344
16141
27707
34947
Other non-metallic mineral prod.(369)
366
NA
27207
796
23974
1018
NA
32882
17570
12941
4202
9240
3147
19876
19220
3422
12896
7052
29075
33629
Iron and steel(371)
1151
NA
38912
1324
34607
2056
817
35832
39561
15560
4852
12073
3363
29868
27704
2590
15505
10604
34443
44322
Non-ferrous metals(372)
1006
NA
38303
1082
32843
1524
628
34492
33612
13320
4770
8607
4112
16955
26397
2787
12552
10436
29437
36339
Fabricated metal products(381)
508
NA
24343
747
23737
1507
641
29586
20029
12336
3969
6434
2067
18016
19264
2214
11315
6083
27639
31839
Machinery,except electrical(382)
1059
13241
33149
868
25722
1844
560
34559
29494
13175
5763
5828
2371
17351
25128
2540
12525
8782
36926
47645
Machinery electric(383)
798
13277
36002
1034
24971
1996
566
33742
31471
11990
3947
4931
3055
19473
24905
2874
12828
10660
29781
58329
Transport equipment(384)
997
17215
37085
1019
36090
1908
685
31988
39164
16460
4489
7799
3290
21051
26430
3465
14300
9853
37206
48983
Professional & scientific equipm.(385)
499
NA
27415
847
22165
1528
526
34496
28386
11225
3896
8231
2549
19060
22818
4697
11076
6412
30038
44382
Other manufactured products(390)
393
NA
25091
705
24119
935
NA
25950
16223
10109
2935
7684
1953
16571
16335
1856
10591
6226
24621
27734
Source: Unido Website, www.unido.gov, some data brought forward by appreciating wages by the local cpi, and depreciating by change in US currency.
58
Wages and Salaries in Various Countries as a Percentage of Wages and Salaries in Thailand, per Employee, by Sector, 1998
Year
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
UNIDO Data from Year
1992
1995
1998
1994
1998
1998
1997
1994
1998
1997
1998
1998
1997
1998
1998
1994
1996
1998
1998
1998
canada
china
hongkong
india
indonesia
italy
japan
korea
malaysia
mexico
996
483
146
265
104
Country
bangladesh brazil
philippines singapore
TOTAL MANUFACTURING(300)
25
406
1139
33
919
54
22
1237
Food products(311)
34
312
1224
34
1068
42
NA
1669
798
488
161
260
126
Beverages(313)
39
379
1458
30
1354
49
18
1731
1106
550
226
224
190
Tobacco(314)
9
394
1095
36
1052
9
9
677
1623
590
64
323
78
Textiles(321)
28
312
1208
31
962
52
NA
1185
611
448
147
250
Wearing apparel,except footwear(322)
14
NA
552
27
660
25
13
725
343
309
92
Leather products(323)
43
NA
1291
47
1659
56
21
1681
732
715
Footwear,except rubber or plastic(324)
86
NA
920
40
779
47
23
1151
753
Wood products,except furniture(331)
26
283
1563
30
1222
31
NA
1443
540
Furniture,except metal(332)
32
342
1318
36
1321
48
21
1580
Paper and products(341)
42
302
860
17
625
37
16
Printing and publishing(342)
19
323
597
16
691
47
Industrial chemicals(351)
36
NA
922
NA
Other chemicals(352)
35
NA
785
21
Petroleum refineries(353)
32
NA
275
8
Misc. petroleum and coal products(354)
23
NA
1158
Rubber products(355)
27
582
Plastic products(356)
40
419
Pottery,china,earthenware(361)
30
Glass and products(362)
747
spain
thailand taiwan turkey
uk
usa
796
100
478
293
1183
1484
869
825
100
584
347
1269
1332
1061
1194
100
664
395
1451
1592
NA
845
100
592
296
1921
1454
92
666
653
100
470
243
1023
1159
168
67
391
416
100
295
151
607
681
177
NA
121
928
1020
100
733
310
1420
1812
486
162
306
76
878
605
100
510
242
1238
1280
635
126
193
88
825
754
100
513
270
1255
1377
1085
678
167
238
91
845
903
100
650
274
1601
1443
864
627
325
96
166
73
501
609
100
318
251
800
1028
NA
985
634
278
108
181
62
512
508
100
322
171
804
726
52
NA
872
966
373
188
175
94
706
693
100
402
301
919
1100
NA
39
20
1151
1003
340
137
278
173
856
764
100
340
354
945
1124
NA
32
10
NA
373
NA
79
NA
112
NA
287
100
190
140
286
416
43
NA
55
12
NA
378
NA
250
303
93
NA
NA
100
673
486
632
1355
1631
40
1083
72
NA
1654
1464
656
186
441
135
874
1376
100
533
622
1477
1666
1071
75
1102
54
19
1510
1019
545
169
255
115
750
997
100
573
315
1286
1449
NA
1091
49
748
78
31
1813
1520
600
201
377
144
NA
1200
100
694
553
1450
1702
24
NA
665
18
697
32
14
786
768
343
95
219
86
NA
525
100
262
373
640
807
Other non-metallic mineral prod.(369)
11
NA
795
23
701
30
NA
961
513
378
123
270
92
581
562
100
377
206
850
983
Iron and steel(371)
44
NA
1502
51
1336
79
32
1384
1528
601
187
466
130
1153
1070
100
599
409
1330
1711
Non-ferrous metals(372)
36
NA
1374
39
1178
55
23
1237
1206
478
171
309
148
608
947
100
450
374
1056
1304
Fabricated metal products(381)
23
NA
1099
34
1072
68
29
1336
904
557
179
291
93
814
870
100
511
275
1248
1438
Machinery,except electrical(382)
42
521
1305
34
1013
73
22
1361
1161
519
227
229
93
683
989
100
493
346
1454
1876
Machinery electric(383)
28
462
1253
36
869
69
20
1174
1095
417
137
172
106
678
867
100
446
371
1036
2030
Transport equipment(384)
29
497
1070
29
1042
55
20
923
1130
475
130
225
95
608
763
100
413
284
1074
1414
Professional & scientific equipm.(385)
11
NA
584
18
472
33
11
734
604
239
83
175
54
406
486
100
236
137
640
945
Other manufactured products(390)
21
NA
1352
38
1299
50
NA
1398
874
545
158
414
105
893
880
100
571
335
1326
1494
Source: Unido Website, www.unido.gov, some data brought forward by appreciating wages by the local cpi, and depreciating by change in US currency, china data brought forward as ratio to total mfg wage
59
Tariff Rates for Exports of Thailand Imported By the USA
Top 100 exports to the US listed by HS code
Products are listed in order of value in 1999
Thailand
0306130006 Shrimp/Prawn Shell-On Count Size 33-45 Per Kg Frzn
0306130009 Shrimp/Prawn Shell-On Count Size 46-55 Per Kg Frzn
0306130012 Shrimp/Prawn Shell-On Count Size 56-66 Per Kg Frzn
0306130015 Shrimp/Prawn Shell-On Count Size 67-88 Per Kg Frzn
0306130018 Shrimp/Prawn Shell-On Count Size 89-110 Per Kg Frz
0306130040 Shrimps And Prawns, Peeled, Frozen
1006309010 Rice, Semi/Wholly Milled, Nesoi, Long Grain
1.4c/kg
1604143020 Tuna, Albacore, No Oil Airtight Cntnr Ov 7kg Nesoi 12.5%
1604143040 Tunas/Skipjack Nesoi No Oil Airtite Cntr Over 7kg
12.5%
1604144000 Tunas/Skipjack No Oil, No Airtite Cntr, Over 6.8kg 1.1c/kg
1605102040 Crabmeat, Prepared, Nesoi, In Airtight Containers
1605201030 Shrimps And Prawns, Prepared Nesoi, Frozen
2008200090 Pineapples, Prepared Or Preserved, Nesoi
35c/kg
2008921040 Fruit/Nut/Plant Mxtrs Canned No Apricot Citrus Etc
5.6%
2009404040 Pineapple Juice, Unfermented, Nesoi, Not Frozen
1c/lt
2523100000 Cement Clinkers
2523290000 Portland Cement, Other Than White Portland Cement
4001210030 Natural Rubber In Smoked Sheets, Grade 3
4001210050 Natural Rubber In Smoked Sheets, Nesoi
4001220025 Technically Specified Natural Rubber, Grade 20
4015110000 Surgical & Med Glove, Vulcanize Rubber, Nesoi
4202126000 Trunks,Suitcases,Etc,Veg Fiber,Not Pile,Nesoi
6.0%
4202128070 Trunks,Suitcases,Vanity Case,Etc,Of Man-Made Fiber 18.6%
4202923031 Travel,Sportsbags,Etc,Not Backpacks,Manmade-Fiber
18.6%
4414000000 Wooden Frames Paintings, Photographs, Mirrors, Etc
4419008000 Tableware And Kitchenware, Of Wood, Nesoi
6105100010 Men'S Shirts Of Cotton, Knit
20.2%
6107110010 Men'S Underpants And Briefs, Of Cotton, Knit
7.6%
6110102030 Women'S Sweaters Of Other Wool Or Fah, Knit
16.4%
6110202065 M/B Other Apparel Of Cotton, Knit
18.2%
6110202075 W/G Other Apparel Of Cotton, Knit
18.2%
6110303055 W/G Other Sweaters Of Other Manmade Fibers, Knit
32.9%
6111206010 Babies' Sunsuits & Similar Apparel Of Cotton, Knit
8.6%
6111206020 Babies' Grmnts & Clthng Access Sets Of Cotton,Knit
8.6%
6111206040 Babies' Ot Grmnts & Clothing Access Of Cotton,Knit
7.3%
6201933000 M/B Garments Water Resistant; Mmf, Not Knit
7.3%
6202934500 W/G Garm Desgn Rnwr Mmf <36% Wgt W/Fah N Kt Or Crc 17.0%
6204624020 Women'S Trousers & Breeches Other Cotton, Not Knit 17.3%
6212109020 Bras Not Containing Lace Net Or Embroidery Mmf
8.5%
6403996040 Ftwr Sol R/P Up Lthr Exc Pigskin Tenis-Gym Shoe Me 10.0%
6403999030 Ftwr S R/P U-L Exc Pgskn V>2.50pr Tenis Women Miss
7103910010 Rubies Cut But Not Set For Jewelry
7103910020 Sapphires Cut But Not Set For Jewelry
7103991000 Gemstones, Nesoi, Cut But Not Set Suitbl Fr Jewlry
7113112000 Slvr Jwlr Etc Nt Ov $18 Per Doz Pcs Or Pts
7113115000 Slvr Jwlry Etc Val Ov $18 Per Doz Pcs
5%*
7113195000 Gold Or Platinum Jewelry, Plt/Cld Or Not, Nesoi
7323930030 Cooking Ware Of Stainless Steel, And Parts Thereof
7615193000 Aluminum Cooking & Kitchen Ware Enameled Not Cast
Mexico
0.6c/kg
6.6%
6.6%
0.5c/kg
2.1%
1.9%
6.0%
6.0%
5.1%
6.0%
6.0%
2.5%
3.0%
60
8414510030
8415100040
8471602000
8471603500
8471605760
8471606400
8471704035
8471704065
8471801000
8473301000
8473305000
8504406007
8504406012
8504408500
8516500030
8516500060
8516500090
8517110000
8517198080
8517210000
8518220000
8519990045
8521106000
8525203025
8525408085
8527211015
8527214040
8528121201
8528121600
8528122025
8528122420
8528122800
8528123235
8529901300
8534000020
8542138051
8542138057
8542138058
8542138060
8542138066
8542138072
8542300065
8542300090
8544300000
8708915000
9009120000
9018907570
9401696010
9403608080
9503900045
9999950000
Ceiling Fans,Perm Inst,Slf-Cont Elec Mtr < 125w
Air-Conditioners,Wind/Wall,Self-Contain <2.93kw/Hr
Keyboard Units
Color Cathode-Ray Tube (Crt) Monitors
Dot Matrix Printer Units W/ Cntrl & Prt Mechanism
Printers, Nesoi, Ink Jet
Floppy Disk Drive Unt, Nesoi, W/Out Extrnl Pow Spy
Hard Disk Drive Unt, Nesoi, W/Out Extnl Powr Suply
Control Or Adapter Units For Adp Machines
Prts Of Adp Mch, Not Incrprtng Crt,Prt Crct Assem.
Pts & Accessories Of Mach Of Heading Of 8471,Nesoi
Powr Suppls Fr Inc Into Adp Mach/Units, 50w - 150w
Power Suppls Fr Inc Into Adp Mach/Units, 150-500w
Static Converters For Telecommunication Apparatus
Microwave Ovens Having Capacity <=22.5 Liters
Microwave Ovens Having Capacity >22.5l <=31.0l
Microwave Ovens Having Capacity >31.0 Liters
Line Telephone Sets With Cordless Handsets
Multiline Telephones Incl Key, Call Director
Facsimile Machines
Multiple Loudspeakers,Mounted In Same Enclosure
Optical Disc (Incluiding Compact Disc) Players
Video Cassette & Cartridge Recorder/Players, Color
Radio Transcievers, Hand-Held, Freq >400 Mhz
Still Image Video Camera,Vdeo Camera Recordr,Nesoi
Motor Vehicle Radio-Tape Players, Cassette, Stereo
Motr Veh Radio-Comb(Inc Optical Disc)Playes,Record
Tv Rec,Non-Hi Def,Col,Sngl Pict Tub N/O 34.29cm
Tv Rec,Non-Hi Def,Col,Singl Pict Tub Diag >33.02cm
Tv Rec,Non-Hi,Col,Sin Pct Tube,Non-Proj, > 26 Cm
Tv Rec,Non-Hi Def,Col,Sing Pt Tub,Non-Pro, Ov33.02
Recp App Fr Tv,No-Hi,Col,Sing Pct Tube,Disp >35.56
Tv Rec,Non-Hi,Col,Sing Tube,Non-Proj,Disp Ex 45-50
Prnt Cir Assem,Othr Than Tuner,Pc Brd Or Tv, Nesoi
Printed Circuits Of Plastic/Glass =>3 Layers, Cndt
Mono Ic,Dig,Sil,Mos,Exc Vol(Eeprom) < 80,000 Bits
Mono Ic,Dig,Sil,Mos,Exc Vol,(Eeprom) >900,000 Bits
Mono Ic,Dig,Sil,Mos,Ex Vol,(Eprom) N/O 80,000 Bits
Mono Ic,Dig,Sil,Mos,Ex Vol,(Eprom) > 900,000 Bits
Mono Ic,Dig,Sil,Mos(Asic)&(Pla)Microproces 8bits&<
Monolithic Ic, Digital, Silicon,(Mos),(Asic),(Pla)
Monolithic Ic, Operating Frequency <100 Mhz,Analog
Monolithic Ic, Freq.,<100 Mhg(Analog/Digital)Nesoi
Insulated Wiring Sets For Vehicles Ships Aircraft
Radiators For Vehicles, Nesoi
Electrostatic Photocopying Image, Indirect Process
Pts & Accessories Of Dialysis Inst & Apparatus
Hshld Seat W Wooden Frame For Chrs, Exc Uphl Nesoi
Wooden Furniture, Nesoi
Toys And Models, Nesoi
Estimated Imports Of Low Valued Transactions
2%*
2%*
2%*
3.9%*
5.0%
5.0%
2.9%
5%*
3.7%*
Source: Harmonized Tariff Schedule of the United States (2000)
Note: Figures marked with a (*) have had GSP privileges revoked. If the column is blank then there is no tariff
for that item. Some items, such as apparel and textiles, face quotas as well as tariffs.
61
U.S. Imports from Various Countries of:
030613 Shrimps and Prawns
900
800
700
Thailand
US Million Dollars
600
Ecuador
Mexico
500
Indonesia
India
Bangladesh
400
Venezuela
Vietnam
300
Honduras
200
100
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
1006 Rice
160
140
120
US Million Dollars
Thailand
India
100
China
Pakistan
Italy
80
Mexico
Australia
60
Egypt
Canada
40
20
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
16 Edible Preparations Of Meat, Fish, Crustaceans, Molluscs Or Other Aqua
800
700
US Million Dollars
600
500
Thailand
Canada
Brazil
400
Indonesia
Ecuador
Philippines
300
200
100
0
1995
1996
1997
1998
1999
62
U.S. Imports from Various Countries of:
20 Preparations Of Vegetables, Fruit, Nuts, Or Other Parts Of Plants
500
450
400
US Million Dollars
350
Canada
300
Spain
Mexico
250
Brazil
Thailand
200
Philippines
150
100
50
0
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
4015 Rubber Gloves and Aprons
700
600
500
US Million Dollars
Malaysia
Thailand
Indonesia
400
China
Mexico
Sri Lanka
300
United Kingdom
Taiwan
India
200
100
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
42 Leather and Products Thereof
3,500
3,000
2,500
US Million Dollars
China
Italy
Thailand
2,000
Philippines
Indonesia
Korea
1,500
Mexico
India
Taiwan
1,000
500
0
1992
1993
1994
1995
1996
1997
1998
1999
63
U.S. Imports from Various Countries of:
4414 Wooden Frames
120
100
Mexico
US Million Dollars
80
China
Thailand
Indonesia
Taiwan
60
Canada
Italy
India
40
Malaysia
20
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
61 Articles of Apparel and Clothing Accessories, Knitted or Crocheted
3,500
3,000
2,500
US Million Dollars
Mexico
Hong Kong
China
2,000
Honduras
Taiwan
Korea
1,500
El Salvador
Dominican Rep
Thailand
1,000
500
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
62 Articles of Apparel and Clothing Accessories, Not Knitted or Crocheted
5,000
4,500
4,000
US Million Dollars
3,500
Mexico
China
3,000
Hong Kong
Dominican Rep
Indonesia
2,500
Bangladesh
India
2,000
Korea
Philippines
1,500
1,000
500
0
1992
1993
1994
1995
1996
1997
1998
1999
64
U.S. Imports from Various Countries of:
64 Articles of Footwear
9,000
8,000
7,000
China
US Million Dollars
6,000
Italy
Brazil
5,000
Indonesia
Mexico
Spain
4,000
Thailand
United Kingdom
3,000
Dominican Rep
2,000
1,000
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
711311 Articles of Jewelry, Of Silver
180
160
140
Italy
US Million Dollars
120
Thailand
China
100
Mexico
Dominican Rep
Indonesia
80
Canada
India
60
Hong Kong
40
20
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
711319 Articles of Jewelry, Of Gold or Other Precious Metals
1,400
1,200
1,000
US Million Dollars
Italy
India
Hong Kong
800
Thailand
Israel
Turkey
600
Canada
Dominican Rep
Mexico
400
200
0
1992
1993
1994
1995
1996
1997
1998
1999
65
U.S. Imports from Various Countries of:
8471 Computers and Parts
12,000
10,000
Japan
US Million Dollars
8,000
Singapore
Taiwan
Mexico
China
6,000
Malaysia
Korea
Thailand
4,000
Philippines
2,000
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
8471704065 Hard Magnetic Disk Drive Units, Nesoi, Not Assembled In Cabine
8000
7000
US Million Dollars
6000
Singapore
5000
Japan
Malaysia
Thailand
4000
Philippines
Hungary
3000
China
2000
1000
0
1996
1997
1998
1999
U.S. Imports from Various Countries of:
8471606400 Printers, Nesoi, Ink Jet (SIC3577)
1200
1000
US Million Dollars
800
Mexico
Malaysia
Singapore
600
Thailand
China
Japan
400
200
0
1996
1997
1998
1999
66
U.S. Imports from Various Countries of:
8471603500 Color Cathode-Ray Tube (Crt) Monitors (SIC3577)
2000
1800
1600
US Million Dollars
1400
Mexico
China
1200
Korea, Republic Of
China (Taiwan)
Japan
1000
Thailand
Malaysia
800
Indonesia
Philippines
600
400
200
0
1996
1997
1998
1999
U.S. Imports from Various Countries of:
8542 Integrated Circuits
12,000
10,000
Korea
US Million Dollars
8,000
Japan
Malaysia
Philippines
Taiwan
6,000
Singapore
Canada
Hong Kong
4,000
Thailand
2,000
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
851650 Microwave Ovens
500
450
400
US Million Dollars
350
Korea
China
300
Thailand
Malaysia
Singapore
250
Sweden
Germany
200
Japan
Taiwan
150
100
50
0
1992
1993
1994
1995
1996
1997
1998
1999
67
U.S. Imports from Various Countries of:
8521 Video Cassette Players and Recorders
1,800
1,600
1,400
Japan
US Million Dollars
1,200
China
Malaysia
1,000
Indonesia
Mexico
Korea
800
Thailand
Singapore
600
India
400
200
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
854430 Ignition Wiring Sets
4,500
4,000
3,500
Mexico
US Million Dollars
3,000
Philippines
Thailand
2,500
China
Canada
Japan
2,000
Indonesia
Honduras
1,500
France
1,000
500
0
1992
1993
1994
1995
1996
1997
1998
1999
U.S. Imports from Various Countries of:
870891 Radiators
250
200
US Million Dollars
Mexico
Thailand
150
Canada
Japan
China
Indonesia
Korea
100
Germany
Philippines
50
0
1992
1993
1994
1995
1996
1997
1998
1999
Sources for this series of tables: USITC Dataweb, US National Trade Data Base
68
Share of World GDP and Trade for Some Selected Countries.
Trade as a share of GDP included as a measure of how externally-oriented economies are.
Country
GDP
Trade, Exports
Trade, Imports
% of World Total
% of World Total
% of World Total
1992
1998
1992
1998
1992
1998
United States
25.7%
27.4%
11.8%
12.6%
14.6%
17.6%
Japan
15.9%
14.2%
9.5%
7.2%
6.1%
5.2%
Germany
7.8%
7.4%
12.0%
10.0%
10.8%
8.7%
France
5.7%
5.1%
6.5%
5.7%
6.3%
5.4%
United Kingdom
3.9%
4.4%
5.3%
5.0%
5.9%
5.9%
Italy
5.3%
4.0%
5.0%
4.4%
4.9%
4.0%
China
2.2%
3.2%
2.4%
3.4%
2.1%
2.6%
Brazil
1.6%
2.6%
1.0%
0.9%
0.6%
1.1%
Canada
2.1%
2.1%
3.7%
4.0%
3.2%
3.8%
Spain
2.5%
1.9%
1.8%
2.0%
2.6%
2.5%
India
0.9%
1.5%
0.6%
0.6%
0.6%
0.8%
Netherlands
1.4%
1.3%
3.9%
3.7%
3.6%
3.4%
Mexico
1.4%
1.3%
0.8%
2.2%
1.3%
2.4%
Australia
1.3%
1.3%
1.1%
1.0%
1.1%
1.2%
Korea, Rep
1.3%
1.3%
2.1%
2.5%
2.2%
1.7%
Russia
1.7%
1.2%
1.1%
1.4%
1.0%
1.1%
Argentina
1.0%
1.1%
0.3%
0.5%
0.4%
0.6%
Switzerland
1.0%
1.0%
1.8%
1.5%
1.7%
1.5%
Belgium
0.9%
0.9%
3.4%
3.2%
3.3%
3.0%
Sweden
1.0%
0.8%
1.6%
1.6%
1.3%
1.3%
Hong Kong
0.3%
0.5%
0.8%
3.2%
3.3%
3.5%
Indonesia
0.5%
0.5%
0.9%
0.9%
0.7%
0.5%
Thailand
0.48%
0.47%
0.91%
0.99%
1.07%
0.78%
Singapore
0.2%
0.3%
1.8%
2.0%
1.9%
1.9%
Malaysia
0.2%
0.3%
1.1%
1.4%
1.0%
1.1%
Philippines
0.2%
0.3%
0.3%
0.5%
0.4%
0.6%
Vietnam
0.1%
0.2%
0.2%
Total
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Source: Calculated from World Development Report 1999/2000
Trade, Imports & Exports
As a % of GDP
1992
1998
16.4%
20.5%
15.5%
16.3%
46.8%
47.4%
35.7%
40.5%
45.6%
46.6%
29.7%
39.0%
32.7%
34.9%
16.4%
14.8%
51.4%
68.5%
28.5%
43.7%
19.7%
18.1%
85.6%
98.4%
22.8%
64.7%
27.2%
31.7%
53.3%
61.3%
19.8%
39.5%
11.8%
17.5%
54.3%
55.7%
113.3%
127.6%
47.9%
67.0%
197.6%
229.2%
48.3%
55.1%
66.18%
70.96%
294.6%
222.2%
137.3%
165.2%
48.2%
77.7%
78.1%
31.9%
37.3%