International trade; how it's really run:
Tsunami-hit Thais told: Buy six planes or face EU tariffs
FRASER NELSON
POLITICAL EDITOR
TSUNAMI-struck Thailand has been told by the European Commission that it must buy six A380 Airbus aircraft if it wants to escape the tariffs against its fishing industry.
While millions of Europeans are sending aid to Thailand to help its recovery, trade authorities in Brussels are demanding that Thai Airlines, its national carrier, pays £1.3 billion to buy its double-decker aircraft.
The demand will come as a deep embarrassment to Peter Mandelson, the trade commissioner, whose officials started the negotiation before the disaster struck Thailand - killing tens of thousands of people and damaging its economy.
While aid workers from across Europe are helping to rebuild Thai livelihoods, trade officials in Brussels are concluding a jets-for-prawns deal, which they had hoped to announce next month.
As the world’s largest producer of prawns, Thailand has become so efficient that its wares are half the price of those caught by Norway, the main producer of prawns for the EU.
To ensure the Thais cannot compete, EU officials five years ago removed its shrimp industry from the EU’s generalised system of preferential tariffs - designed to share Western wealth with developing countries by trade.
The EU has instead slapped a tariff of 12 per cent on its fish - three times that imposed on prawns from Malaysia, its neighbour. This is still less than the US tariff on Thai prawns: 97 per cent.
The prawn tax is one in a series of protectionist measures expected to cost east Asia some £130 million each year - money being taken from its economies while EU citizens donate millions in charity.
Five days after the tsunami struck, the EU legislated against Thailand by slapping a new tariff designed to extinguish its booming trade in cumarin, a plant extract used in perfume.
On 31 December, the EU imposed duties of €3,480 (£2,430) a tonne for Thai exports of cumarin - a move entirely designed to protect Rhodia, a French chemicals firm and the EU’s only producer of cumarin.
Oxfam has attacked the tariffs, saying: "When countries are lying prostrate before us, it is criminal to continue to tax them on what they sell."
Sri Lanka has already pleaded to be exempt from EU and US textiles tariffs as it tries to recover.
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