Thailand may shun Airbus over 'unfair' EU trade

Thailand may shun Airbus over 'unfair' EU trade

Panarat Thepgumpanat, Reuters, Bangkok

Thai Prime Minister Thaksin Shinawatra said on Wednesday his government may review future plans to buy Airbus planes if the European Union continued to treat Thailand's agricultural exports "unfairly".

Thaksin told reporters Thailand's trade with the European Union was at a disadvantage compared to other countries at a comparable level of development, such as Malaysia.

"Malaysia has trade privileges, but Thailand does not. They can't say that we are in a better position. It's not fair," he said. "If they treat us unfairly, we will treat them the same way."

"We are expanding terminals for new aircraft and we plan to buy Airbus planes from the EU. But if the EU is not fair with us, we will also be uncomfortable in buying their planes."

Thailand might turn to Boeing Co instead, he said.

Airbus SAS is owned 80 percent by European Aeronautic, Defense & Space Co NV (EADS), based in Germany and France, and 20 percent by Britain's BAE Systems Plc.

Airbus said in August that Thai Airways International PCL had ordered eight planes after winning approval to spend US$1.4 billion over the next five years to boost its fleet. Thaksin said that order was not in doubt.

But Thailand is beginning negotiations with the European plane giant on further planes for both national carrier Thai Airways and the Royal Thai Air Force, domestic media say.

Civil-oriented Airbus has a limited range of military products: the A400M military transport, and tanker and VIP versions of its airliners. The Thai air force has been authorized to buy a second VIP plane.

Thaksin's comments followed domestic media reports quoting Commerce Minister Wattana Muangsuk as saying the Thai government should get tough with Airbus.

That would increase pressure on the European Union to lighten its tariffs on Thai shrimp exports at a time of domestic oversupply and low prices, Wattana said.

Future plane purchases from Airbus should take into consideration how accommodating the EU was to shrimp exports from Thailand, the world's biggest frozen shrimp exporter, Wattana said.

He said Thailand had been treated unfairly by the European Union, because Thai shrimps were subject to import tariffs as high as 12 percent, while shrimps from Malaysia, which had "EU Generalized System of Preferences" status, faced only a four percent tariff.