China’s textile quotas could benefit Thailand’s SMEs

QUOTAS INTRODUCED for Chinese textile exports could benefit Thailand’s SMEs in trade with South Africa on a macro level and swing the Thai garment sector around, according to the Royal Thai Embassy in South Africa. “Thailand was always popular for clothing and textiles,” says Adisai Dhummakupt, commercial minister for the Royal Thai Embassy. “Competition from China affected garment outputs to South Africa, but quotas may help the Thai industry.” Thailand and South Africa share synergies on socio-economic fronts with bilateral trade growth up 28% for the first half of the year compared with the same period in 2006. “South Africa is far from Thailand, and Thailand is far from South Africa,” remarks Dhummakupt. South Africa is, however, Thailand’s biggest trading partner in Africa, with open skies, a general bi-lateral trade agreement signed in 2001, and a protocol on the avoidance of double-taxation on income in place. The local Thai currency has recently strengthened against the US dollar hampering exports to South Africa. Despite this, Thailand’s exports to South Africa have grown 14% this year so far to US$650m (R4.5bn), while South African exports to Thailand are up over 65% to US$340m (R2.3bn) from US$204m (R1.4bn) over the first half of 2006. This puts total trade between the two at US$990m (R6.8bn), though South Africa’s trade balance is US$310m (R2.1bn) in the red for Jan-Jun 2007. Automotive components and accessories have overtaken rice as the main export to SA, with many of the one tonne trucks built from Thai parts, adds marketing officer, Martin Wolter-Grossmann. South Africa exports mainly raw materials, with iron ore and steel products being the main commodity arriving in Thailand. “Thailand has an advanced sea port,” says Dhummakupt on the infrastructure, though cargo is transhipped through Singapore. “They are the strategic international hub, and Thailand is the local port for Indo-China.”