US embassy cable - 05BANGKOK7523

UNCLAS BANGKOK 007523 
 
SIPDIS 
 
DEPARTMENT PASS USTR 
GENEVA FOR USTR 
COMMERCE FOR ITA/MAC/AP/OKSA/JBENDER AND JKELLY 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, TH 
SUBJECT: THAIS TO TAKE U.S. TO WTO OVER CONTINUOUS BOND 
REQUIREMENT FOR SHRIMP IMPORTS 
 
REF: BANGKOK 4311 
 
1.  RTG trade officials decided December 6 to file a 
complaint against the U.S. in the WTO over a U.S. requirement 
that shrimp importers file a continuous bond to cover 
expected anti-dumping duties.  Nadhawan Tanyongmas, Trade 
Officer in the Department of Foreign Trade, said RTG 
representatives in Geneva would be prepared to file the 
complaint with the WTO as early as January 2006. 
 
2.  The RTG action is related to an affirmative anti-dumping 
determination by the International Trade Commission (ITC) in 
January 2005 against Thai shrimp exports.  The ITC ruling 
placed a 5.95 percent duty on shrimp exports from Thailand. 
 
3.  The RTG had considered taking the case to the WTO earlier 
but decided to await the outcome of an ITC review of the 
original anti-dumping determination to consider the impact of 
the December 2004 tsunami which devastated a significant part 
of the Thai shrimp industry.  The ITC review concluded in 
November that anti-dumping duties would remain at the same 
level. 
 
4.  The RTG will be challenging U.S. Customs and Border 
Protection (CBP) rules which require importers of aquaculture 
products subject to affirmative anti-dumping findings to not 
only pay a cash deposit for the amount of the duties on each 
shipment, but also to annually post a secured, continuous 
bond for expected future duties.  The amount of the bond is 
based on calculated duties on the value of an importer's 
shipments over the previous twelve months.  The rules were 
instituted to ensure collection of final anti-dumping duties 
(see reftel). 
 
5.  RTG officials called the continuous bond a "double 
burden" and said it had been a hardship for Thai shrimp 
exporters.  U.S. importers have insisted that Thai exporters 
serve as the importer of record and bear the burden of the 
bond requirement.  Poj Wattananon, president of the Thai 
Frozen Foods Association, expected Thai exporters would need 
to place guarantees of USD 100 million for 2006.  Many 
smaller shrimp exporters have been unable to arrange 
financing for the new bond requirements and have ceased 
exporting to the U.S.  Larger exporters have successfully 
continued exporting but complain that the financial outlay 
for the continuous bond is not only an added expense but also 
causes cash flow difficulties. 
 
6.  Ms. Nadhawan of the Dept. of Foreign Trade said the RTG 
would take the case to the WTO as a violation of Article 18.1 
of the WTO Anti-Dumping Agreement.  Article 18.1 states that 
no specific actions against dumping may be taken except in 
accordance with the Agreement, which sets out tightly defined 
allowable actions.  The RTG will try to make the case that 
the continuous bond is an anti-dumping measure not explicitly 
allowed in the Agreement and therefore in violation of WTO 
rules. 
BOYCE