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BKK Post, March 24, 1998. TRADE



March 24, 1998. TRADE 

Thais will press Rangoon to loosen tight new regulations 
Cross-border trade plunges 

Woranuj Maneerungsee

Thailand's deputy commerce and foreign ministers will attempt to 
persuade the Burmese government to ease its tough new bilateral trade 
regulations during a planned visit to Rangoon early next month.

Border trade between the two countries has plummeted since last December 
when the ruling State Peace and Development Council stipulated that all 
goods must be traded through US dollars-denominated letters of credit.

Burma badly needs hard foreign currency to prop up its ailing economy 
which is experiencing severe inflation.

The new system replaces the traditional baht-kyat payment and has 
resulted in border trade in the Thai northern province of Tak alone to 
fall from 500 million baht a month to 50 million baht.

Other regulations include import controls to reduce Burma's ballooning 
current account deficit and to maintain its foreign currency levels, as 
well as curbing inflation.

Paniti Tungphati, chairman of the Thai Trade Chamber in Tak province, 
said the new regulations were not practical for border trade as no 
commercial banks operated along the border to provide letters of credit.

He also said those involved in border trade are not normally registered 
and therefore could not ask for letters of credit from commercial banks.

Mr Paniti said the impact of the regulations was being felt on both 
sides of the border but it was worse for Burma as consumers there were 
forced to pay more for smuggled goods from Thailand.

The new import controls were also aimed at curbing the import of luxury 
items from Thailand, said Niyom Wairaipanij, chairman of Border Trade 
Committee of Thai Chamber of Commerce. 

Burmese companies are only allowed to import only 60% of what they 
export and goods must by essential to production, such as raw materials.

Border trade between Thailand and Burma reached 8.9 billion baht last 
year, with Thailand exporting goods worth 8.3 billion baht and importing 
667 million baht. 

Overall trade was worth 15 billion baht, with Thailand's importing 2.5 
billion baht and exporting 12.5 billion baht. 

Meanwhile, the Commerce Ministry will ask the Burmese government to 
abolish its monopoly on gem exports, deputy minister Photipong Lamsam 
said. 

He said the Burmese government should limit local firms exporting gems 
to $25,000 if it feared companies would export too much.

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