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Home » Reader question » Reader Question: Does Thailand Affect Prices in ASEAN?
Reader Question: Does Thailand Affect Prices in ASEAN?
Dear readers,
Given the vast amount of knowledge available on Thailandblog, is there anyone who is aware of the price reductions in Thailand upon joining Asean in 2015?
In particular, I suspect there is a great deal of interest in the impact of entry on wine and beer prices.
Regards,
Egon
Thailand has been a member of ASEAN since August 1967, which stands for Association of South-East Asian Nations. You probably mean the AEC, the ASEAN Economic Community, which as it stands will come into effect on the last day of December 2015. Whether that will affect the prices of wine and beer remains to be seen. The AEC does not change products imported from outside the 10 countries, as is the case with wine and also applies to part of the beer market. The AEC also leaves internal taxes such as any excise duties on beer/wine untouched, which remains a national matter. Based on ATIGA, the ASEAN Trade in Goods Agreement, products 'originating' from other ASEAN countries were in principle already free of import duties and the AEC does not change that situation either.
The blush of shame rises to my cheeks! AEC of course. But wine is produced in Vietnam and now small amounts in Laos and Cambodia. Myanmar starts an investigation into planting grapes. Hence my question. Indeed, countries may levy domestic taxes, but there are also import duties. Will these possibly expire?
The mutual free trade agreement within ASEAN, the ASEAN Trade in Goods Agreement referred to above, already provides for, in principle, duty-free importation into the member states of goods that 'originate' in one of those ten member states. If all goes well, the - limited - exceptions that still exist when the AEC enters into force should be a thing of the past.
Incidentally, here and there – also in ASEAN circles – the AEC is sometimes compared to the EU. However, the differences are very large and the basis is simply different. The EU is based on a so-called customs union, which means that the member states all apply the same rate of import duties on goods from so-called third countries and that no import duties are then levied among themselves. The AEC will not be a customs union, but a free trade area in which Member States each apply their own tariff on imports from third countries, and in trade between Member States there is only an exemption from import duty for goods 'originating' in those other countries. member state. This prevents, for example, flows of goods entering ASEAN mainly via the country with the lowest tariff for the products in question and then being able to go to another Member State duty-free.
Personally, I think AEC is becoming a paper tiger. All countries of the AEC are counting themselves rich. There are also Thai people who also see the adverse effects of AEC and they are not happy about it at all.
Meanwhile, AEC is mainly used to fill the bags with all kinds of “AEC projects”.