Thailand to ask EU for tariff cut for drugs war

Thailand to ask EU for tariff cut for drugs war

Dominic Whiting, Reuters, Bangkok

Thai Prime Minister Thaksin Shinawatra will ask the European Union (EU) to slash tariffs on imports from the Southeast Asian country as a reward for battling the illicit drugs trade during his visit to Brussels this week.

Thaksin, who is due to meet European Commission President Romano Prodi on Thursday, will argue Thailand deserves the same zero-percent tariff rate the EU gives five Latin American countries and Pakistan to help them combat drugs.

Thailand says it is fighting drugs production in the notorious "Golden Triangle" region where the borders of Thailand, Laos and Myanmar meet, and clamping down on the flow of heroin and methamphetamines from Myanmar.

"Our position is we feel we are in the same category as those countries fighting drugs so we are requesting the same treatment," Commerce Ministry Spokesman Rachane Potjanasuntor told Reuters.

"The Latin American countries and Pakistan get zero tariff rates and it's affecting our exports, in particular products like tuna and shrimp," he said.

The EU has slashed tariffs on goods from Colombia, Bolivia, Ecuador, Venezuela and Peru since 1990 to encourage their fight against drugs production. Some 90 percent of imports from the five countries are now exempt from EU customs duties.

European officials have argued that Thailand did not qualify for the scheme because it was mostly a transit country for drugs rather than a producer. Most Thai products are subject to EU customs duty of between five and 25 percent.

But in January, the EU extended the tariff cuts to Pakistan, a key ally in the U.S.-led war against the al Qaeda network and the Taliban, because of its role in combating trafficking of heroin from Afghanistan.

Thai officials say the EU is practicing double standards, and point to several crop substitution projects in northern Thailand as proof the country has slashed poppy cultivation for production of opium and heroin.

Thailand is also clamping down on drugs trafficking operations by Myanmar ethnic groups along the Thai-Myanmar border, they say.

"You see what's happening in the courts, police action every day, the border at the moment...there's so much evidence. We're doing the same or even more than other countries," said Rachane.

"I hope the EU will understand and will make a correction," he said, adding that Thailand currently favored negotiations with the EU rather than action through the World Trade Organization (WTO).

In the last month, the Thai army has been involved in several skirmishes with drug-running groups of the United Wa State Army, believed to be the world's largest narcotics army. The Thai army blames the group for the estimated 700 million methamphetamine pills flooding into Thailand each year.

The frequent gun-fights have inflamed relations between the Thai army and Myanmar's military government, which has signed a ceasefire deal with the Wa.

Myanmar accuses Thailand of helping other ethnic minority militias that are using the drugs trade to fund armed separatist struggles.

Thai officials said Thaksin, a telecommunications tycoon before becoming prime minister early last year, would also meet Belgian Prime Minister Guy Verhofstadt and Belgium's Crown Prince Philippe, during his two-day visit to Belgium.