Thais protest EU's planned 53% tax on off-quota chicken exports

Thai chicken farmers and producers from more than 10 export groups gathered at the office of the European Commission in Bangkok yesterday to protest against the bloc's new programme limiting chicken imports.

Under the EU's new quota system, a 53 percent tax will be slapped on processed chicken beyond the allowed quota of each country while the duty for products within the quotas remains unchanged.

The target products are cooked chicken, salted chicken and turkey, which are currently taxed at 10.9 percent, 15.4 percent and 8.5 percent respectively.

The quotas, which are in line with the World Trade Organisation's trade rules, will not be announced until the figures are mutually agreed. Talks on the issue were scheduled next month in Brussels.

The higher tariff on cooked chicken will hurt Thailand the most because Thai exporters have focused on processed chicken since fresh products were banned in 2004 following bird-flu outbreak. Brazil, one of the world's leading chicken exporters, also shares the same fate.

"The new tariff for these products will be as high as 53 percent, which has never been expected by any WTO members, especially, by those developing countries, that have been dependent upon agricultural exports," said the statement submitted by Thai farmers and producers to Jean-Jacques Bouflet, the trade counsellor of the EC's delegation to Bangkok.

They represented the Thai Broiler Processing Exporters Association, the Broiler Raisers for Exporting Association, the Thai Feedmill Association, the Feedstuff Users Promotion Association, among others.

They also said the EU's new trade regime for chicken would affect thousands in the local industry worth billions of baht, including chicken raisers and farmers growing crops used as animal feed.

"Lastly, the group of Thai farmers would like to plead with the EU to review and withdraw the tariff increase for cooked chicken products, since it will destroy the livelihood of Thai farmers and violate the notion of free trade," they said.

Mr Bouflet explained the new programme was planned because of a big jump in exports in recent years from a number of countries including Thailand. The increase had prompted the need to control future expansion, he added.

However, in line with the WTO provisions, the negotiations could lead to compensation for Thailand for the loss of trade resulting from the change, he said.

The compensation will be based on calculations taking into account future trade prospects and quota sizes. The future trade prospects will be calculated as the average annual trade over the last most representative three-year period plus the annual growth rate or 10 percent, whichever is greater.

Earlier, a senior commerce official said Thailand would negotiate for the EU to allow Thailand a quota of 10,000 tonnes per month, which equals the annual export total currently.

According to EU statistics, Thai cooked chicken exports in the EU market have grown rapidly by 74 percent from 61,105 tonnes in 2003 to 106,503 tonnes in 2005. In terms of value, they increased by 54 percent from 176 million to 265.8 million.

The five biggest exporters to the EU are Charoen Pokphand Foods Plc, Sun Valley (Thailand), Betagro, Saha Farms and Grampian Foods Siam.