VZCZCXYZ0010
PP RUEHWEB

DE RUEHBK #1428 0670817
ZNR UUUUU ZZH
P 080817Z MAR 06
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC PRIORITY 7020
INFO RUEHGV/USMISSION GENEVA PRIORITY 1602
RUEAHLC/DEPT OF HOMELAND SECURITY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS BANGKOK 001428 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT PASS USTR FOR BWEISEL, MROHDE, JWEISS 
DHS FOR CUSTOMS AND BORDER PROTECTION 
 
E.O. 12958: N/A 
TAGS: ETRD WTO TH
SUBJECT: THAI SHRIMPERS PROTEST CONTINUOUS BOND 
 
REF: A. 05 BANGKOK 4311 
     ¶B. 05 BANGKOK 7523 
 
¶1.  On March 8, approximately 100 shrimp farmers and hatchery 
operators representing eight Thai shrimp farming associations 
converged on the U.S. Embassy to protest ongoing anti-dumping 
duties that were placed on shrimp imports from Thailand in 
¶2005.  The protestors expressed their opposition to the 
duties, but were particularly dismayed over a continuous bond 
measure instituted by U.S. Customs which requires shrimp 
importers to not only cover duties on shipments, but to post 
a bond for a year's worth of future imports.  In practice the 
bond has been a cost borne by exporters (reftel A).  The 
protestors submitted an open letter addressed to President 
Bush, relevant portions of which are reproduced in paragraph 
¶4. 
 
¶2.  Despite the hardships claimed by the industry from the 
anti-dumping measures and a long recovery from the December 
2004 tsunami which devastated many shrimp farms in southern 
Thailand, Thai shrimp exports to the U.S. climbed 30 percent 
in value in 2005.  Statistics from Thai Customs show overall 
shrimp exports up fifteen percent for the year, with the U.S. 
accounting for more than half of all Thailand's shrimp 
exports.  Nevertheless, shrimp exporters noted that the 
continuous bond measure has hit small- and medium-sized 
exporters particularly hard, forcing them to tie up cash flow 
for a long period in order to post the bond. 
 
¶3.  Ms. Nadhawan Tanyongmas, Trade Officer in the Department 
of Foreign Trade, told Econoff that plans to file a case in 
the WTO against the continuous bond were temporarily on hold 
(reftel B).  Nadhawan said that during FTA negotiations in 
Chiang Mai in January, USTR and Customs officials told the 
RTG negotiating team that they were reviewing the continuous 
bond policy and would try to resolve the issue within 60 
days.  The RTG postponed filing the WTO case until the end of 
March, but Nadhawan said the RTG was prepared to move ahead 
with the case in the absence of any positive action by that 
date. 
 
¶4.  Relevant text of open letter follows:  "Besides the 
injustice and double taxation which is against WTO 
regulations, Continuous Bond is a trade barrier and is 
discriminatory against shrimp products.  This new Continuous 
Bond implemented by the Customs Border Protection Agency 
subject importers to post bond to cover 100 percent of duty 
amount based on previous year's total shrimp imports, whereas 
other products are required to post only 10 percent.  In 
theory, bond is supposed to be posted by importers, but in 
reality that burden has been pushed to and shouldered by 
exporters.  This huge financial burden ties up shrimp 
processors' credit line; they do not have sufficient fund for 
shrimp purchase, causing crisis in domestic shrimp price. 
The Continuous Bond has rocked the whole shrimp industry of 
Thailand and will also impact other businesses in the Shrimp 
Cluster.  As representatives from various shrimp 
organizations in Thailand, we humbly point out to Mr. 
President the crisis we have been through including the 
devastating tsunami, falling shrimp prices and the U.S. 
anti-dumping issued against Thailand.  Please have mercy and 
do not impose more trade barriers against us." 
BOYCE