On August 5 th , 2005 , Mr. Vicha Thitiprasert, Director of Office of Research and Development for Post-harvest and Processed Agricultural Produces, Department of Agriculture, revealed that Norway has temporarily stopped the import of 8 types of fresh vegetables from Thailand, which included peppermint, lemon grass, parsley, coriander, sweet basil, aromatica, Trichodesma indicum, and acacia, because E. coli and Salmonella were found 12 times in a month in peppermint, parsley, sweet basil, Ocimum gratissimum, and kraprao, which were on the Norwegian markets.

     A report from the International Consulting Office on Agriculture at EU said that Iceland had found E. coli, Salmonella, and Enterobacteria in 10 items of fresh vegetable products and leafy vegetables imported from Thailand . In the meantime, the import point of Finland had detected Salmonella in 2 kinds of fresh vegetables; as a result, Finland rejected and returned those products. In the initial stage, the Department of Agriculture hurriedly conducted a traceability in order to seek a root cause of problem by inspecting the GMP system of selection and packaging plants of exporters and the production process. Also, the samples of fresh peppermint and water used for production were randomly selected for testing. Hands of employees and their gloves were checked by means of a swab test. According to the result of the tests, the highest amount of 63 MPN/g of E. coli was discovered in peppermint. But it was not known that which family E. coli belonged to. The Department of Agriculture, therefore, is in the process of coordinating with the Department of Medical Science to identify the family of E. coli so as to protect the effect that might have on the Thai export of fresh vegetable product in the future.

     The operators must take caution in production. They should check every lot of products and ask for cooperation from farmers to improve the cultivation management system, particularly use of fermented fertilizer and bio-fertilizer and to maintain the good image of Thai vegetable products and herbs as well. The application of clean water will help reduce the problem of detaining or destroying products at an import point.

      On May 20 th , 2005 , Department of International Trade under the Ministry of Commerce organized a seminar on “Rules and Regulations on Importing Vegetables and Fruits Overseas : Opportunities and Directions in Exporting Thai Organic Agricultural Products” at Impact Exhibition Centre Muang Thong Thani. The said seminar showed the overall picture of Thai trade, rules and regulations for importing vegetables and fruits to Canada , India , Italy , and New Zealand , including opportunity and direction in exporting food products to Poland .

     Sixty percent of the total imports of Canada come from the US and 85% of the exports of Canada go to the US . While the trades between Canada and Thailand value at US$ 1,560 million dollars a year. Canada , ranked as the 23 rd , exports goods to Thailand worth US$ 500 million dollars per year or 0.12% of the total exports of Canada . Meanwhile, Canada , rated as the 17 th , imports goods from Thailand valuing US$ 1,060 million dollars/year or 0.57% of the total imports of Canada . That means there are still more rooms for Thailand to increase imports to Canada .

     The key good that Thailand exported to Canada in 2004 was canned/processed sea foods, as the champion exported product, with the exporting value of US$ 122.9 million dollars, compared with rice, especially jasmine rice, and canned fruits, ordered as the ninth and tenth exported goods, worth US$ 32.8 million dollars and US$27.3 million dollars respectively. In other words, Canada is ranked as the fifth market of Thailand after the US , Netherlands , Japan , and Germany for exporting canned/processed fruits. The outstanding processed fruits for exports include canned pineapples, processed oranges, mixed fruits in cans, canned baby corns, and pineapple juice with the exporting values of US$ 12.5, 2.9, 2.7, 2.0, and 1.9 million dollars, respectively (statistical data 2004). The processed /canned vegetables and fruits that are exported to Canada must pass the standard grade ; and the package must meet the requirements. In addition, label must contain correct and complete information in two languages, English and French. The products, which will be randomly inspected for the standard test, must be hygienic and safe for consumption. There is no limit for importing processed vegetables and fruits to Canada ; and an importing license is not required, but it may be in the future.

     For exporting fresh vegetables and fruits, Canada has been the ninth export market of Thailand . In 2004, the export value was US$5.8 million dollars, up 11.54% and accounting for 2.4% of the Thai export of fresh vegetables and fruits. The important products for export include chilled longan, frozen durain, and fresh vegetables worth US$1.7, 1.0, and 1.9 million dollars, respectively.

     Vegetable and fruit exporters must obtain a license from Canada Food Inspection Agency or be a member of Dispute Resolution Corporation (DRC). Importing fresh vegetables and fruits to Canada , the products must meet the standards or minimum grades of Canada . Packaging has to be sized as required. Labeling must present correct and complete information; and a confirmation paper for purchasing and selling is required. In addition, the products must be hygienic and safe for consumers – meaning that fresh vegetables and fruits must meet the requirements of Food and Drug Regulations e.g. chemical residues must be lower than the maximum level of those imposed. The product will be randomly selected for standard testing. Some fresh vegetables and fruits, including plants with roots from some countries, must be inspected for insects; otherwise, they will be banned for import. There is no quota for importing fresh vegetables and fruits as well as processed vegetables and fruits to Canada .

     The disadvantage of exporting fresh vegetables and fruits is that a purchaser will not have to pay immediately until such products reach the destination and are checked by the purchaser. That means an exporter must have good storing measures so that the products will stay fresh before reaching the purchaser. As regards to the import-export issues, the Board of Arbitration will seek a solution if a compliant is filed against an importer who possesses a license issued by Canadian Food Inspection Agency or belongs to DRC.

     The export of organic agricultural products has expanded 15-20% a year. In 2004, the volume of selling and purchasing was $US 320-800 million dollars. Canada can produce organic agricultural products 20%; and the another 80% of total organic agricultural products in the country are imported from USA . So, the organic agricultural product market is accounted for only 1% of the overall retail business market. The opportunity of expanding such a market is, therefore, high. Distributing organic agricultural products in Canada can be done through three channels which are supermarket and general store, special store, and agricultural product market, accounting for 49, 48, and 3%, respectively.

     The reasons behind the consumption of organic agricultural products in Canada are the need of consuming the quality and safe foods, allergy to some substances and foods, and paying more attentions to health. Furthermore, 64% of those who buy organic agricultural products belief that the organic agricultural products are safer than regular products. The requirement for the import of organic agricultural products to Canada is classified under Article 5.1 of FDA. All types of food products with a label said “Organic” must present the information pertaining to production method, packaging, labeling, storage, and distribution which is in compliance with Canadian Standard for Organic Agriculture. Using the words as “organic (biologique), “organically grown”, “organically raised”, “organically produced”, “certified organic”, biodynamic” or other words with similar meaning will be grouped under the same category. All types of food products not followed the imposed regulations are against Article 5.1 of FDA and Article 7 of Consumer Packaging and Labeling Act.

     The word “Organic” does not have the same meaning as the word “Pesticide Free” or “No Pesticide”. The little amount of pesticide which is not beyond the amount required in the production   process is considered acceptable. The word “No Pesticide” should not, therefore, be applied on the organic food products.

     For more information, please visit the following websites:

• Canada Food Inspection Agency (CFIA) : www.inspection.gc.ca
• Organic Trade Association : www.ota.com
• www.coab.ca
• www.agr.ca/agriweb/agriweb.htm
• www.certifiedorganic.bc.ca

Source: A seminar on “Rules and Regulations for Importing Vegetables and Fruits to Canada : Opportunity and Direction in Exporting Organic Agricultural Products to Canada ”, by Mr. Sriwat Suwan, Consular Officer (Commercial Section), Office of International Trade Promotion in Toronto city

     Mr. Rachain Photsunthorn, Director-General of the Foreign Trade Department, revealed that the U.S. Department of Agriculture : USDA has issued a regulation on Country of Origin Labeling (COOL) on four categories of agricultural products - fish & shellfish, beef & pork, perishable agricultural commodities, and beans – to be put on shelves in the U.S. These products regardless of their origin production must be put on COOL as an information for consumers to make decision on purchasing. This regulation will come into force on fish and shellfish category first on April 4 th , 2005 and the rest of three categories on September 30 th , 2006 onwards.

     For the labeling method, retailers must put English label on a package where it can be seen clearly. In case of the products imported from overseas, the statements on the label are as follows:

1. In case of being not processed in U.S. , the word “ Product of (country)” must be included in the label. For meat products, the origin of animals is from overseas, but they are raised and slaughtered in U.S. It must be said on the label as “Import from (country), raised and slaughtered in U.S. ” .

2. In case of being processed in U.S. , it must be said on the label as “From (country), processed in the United States ”. Such a product is not considered as originated from U.S.

Exemption

     If the said four categories of agricultural products are cooked for foods or being processed, resulting in physical and chemical changes, COOL will not be required. The exempted products are ham, bacon, orange juice, peanut butter, breaded shrimps, mixed vegetable salad, etc.

     In addition, USDA also requires retailers in U.S. or producers overseas at least one year to organize and keep the data concerning the products with COOL requirements e.g. product origin, list of retailers, etc., for traceability if it is found afterwards that consumers are in danger after consuming such a product. A punishment is also set for those who infringe not to put a label on or to present fake information on label. They will be fined at most not more than US$ 10,000 dollars for each punishment.

Source: http://www.dft.moc.go.th/news/news_detail.asp?news_id=117&category_id=3

     Mrs. Amphawan Pichalai, Director of the International Trade Promotion Office in Fukuoka City , Japan , revealed that the Japanese Government is now in the process of switching a system inspecting chemical residues in both imported and domestic food products from the negative list system to the positive list system. It is expected that this new system will become effective in the mid of next year.

     The reason behind the above-mentioned change is that presently, there are only 240 chemical substances on the negative list while there are more than 700 dangerous chemical substances existed. As a result, the Japanese Government cannot control and hold back the import and sales of the food products containing excessive amount of chemical residues.

     “The new system will have a wider impact on both local food production and imported food products. It is, therefore, a warning for Thai food exporters who have exported their food products to Japanese markets and for those who are going to enter into the Japanese markets to be prepared.”

Source: Daily Matichon Newspaper.

     The joint talks between Thai-New Zealand on international free trade agreement were concluded on November 30 th , 2004 in Vientiane city, Laos . Now, each party is in an internal step of proceeding this matter. It is expected to agree upon the agreement in April 2005 and become effective on July 1 st , 2005 . The agreement will cover the following issues.

1. Service Trade

     Both parties will open the service trade within three years after the agreement comes into force. During no talk of market opening, both parties will provide more convenience for Thais and New Zealanders who travel to work and contact businesses in individual country. On the New Zealand side, a Thai cook, receiving a diploma from the Department of Skill and Labor Development, will be allowed to work in New Zealand for a three-year term with a one-year extension with an employment contract.

     On the Thai side, New Zealand business men who attend a meeting and come to Thailand on a business trip can apply for a multiple entry visa at the Thai embassy in a foreign country and stay in Thailand not more than 90 days. Also, New Zealand investors shall use a service center for visa and work permit without a restriction of owning the asset worth more than 30 million baht.

2. Investment

     Thailand and New Zealand will open a free trade investment outside the service sector under the condition that New Zealand will allow Thai people to invest 100% in all types of businesses except fisheries; and if that investment is worth more than 50 million New Zealand dollars, then, a permission must be granted by Board of International Investment. In the future, the ceiling of such a permitted investment will be extended to 100 million New Zealand dollars from 50 million, which will yield more benefits to Thai businessmen. In Thailand , New Zealand businessmen can open a 100% direct free investment in some types of businesses which the government has a policy to promote the investment with the investment capital not less than 3 million baht. Such businesses include production of electronics parts, electrical appliances, software, machinery, paper products, food processing with the application of modern technology, and automobile parts, etc.

     Furthermore, both parties will provide a mutual investment promotion and protection to each other which is in line with TAFTA.

3. Co-operations Related to Trade

     Thailand and New Zealand will join hands together to develop various aspects in the areas of facilitating and promoting trade between the two countries, e.g. custom protocol, electronics commerce, intellectual property, and competition policy, through trade information exchange and human resources development so as to barter knowledge of personnel of the two countries.

4. Correction of Plant and Animal Hygiene Measures

     New Zealand has issued tense measures on plant and animal hygiene. As a consequence, vegetable, fruit, and meat products of Thailand cannot be exported to New Zealand due to the delay in analyzing and testing the products. In order to solve the problem of agricultural products under the free trade agreement, Thailand and New Zealand formed a committee on hygiene measures. The priority products, such as longan, lichee, mangosteen, ginger, and durian, are initially stated and will become effective within two years. Some products have already been

     Implemented. It is expected that Thai longan will be able to be exported to New Zealand soon.

     For more details, please click here www.ftamonitoring.org

     Before opening the free trade on vegetables and fruits between Thailand and China in October 2003, Thailand had a trade surplus of BH 4,909 million. In 2003, Thailand exported vegetables and fruits worth BH 8,228 million in total while importing from China for the value of BH 3,319 million. The main product in the category of vegetables Thailand exported was cassava in the forms of pellet and stripe with the export value of BH 5,406 million. For the fruit category, the important exported fruits are longan, durian, pineapple, banana, and papaya while most of the imported vegetables and fruits are vegetables and fruits grown in cold whether such as mushroom, carrots, potatoes, apples, peaches, and plumps.

Advantages of Opening Free Trade with China

     After the opening of free trade on vegetables and fruits between Thailand and China during the time period of October 2003 and September 2004, the export value of Thailand was approximately BH 11,325 million, increasing by 57.55% in the same period of the previous year. The import value was worth 4,501 million, increasing by 130%. So, Thailand still had a trade surplus of BH 6,824 million, 30.37 % increase, due to the large amount of cassava produced in the country while the production of Indonesia and Vietnam decreased. In the past year from October 2003 to September 2004, Thailand had exported vegetables and fruits worth BH 11,325 to China and imported with the value of BH 4,501 million. The following figures are values of exported and imported vegetables and fruits.

     Thai commodities with high export values include pellet cassava, striped cassava, dried and fresh longans, pineapples, durians, mangosteen, coconuts, and bananas.

     The imported commodities with high values are carrots, garlic, dried mushrooms, oranges, apples, pears, and chestnuts.

Claimed Disadvantages of Opening Free Trade with China

• Even though the export value enlarges, but the volume of imported goods increases at a higher rate. The influx of imported vegetables and fruits grown in the cold areas, especially garlic, white onions, apples, peaches, oranges, and plumps, will inevitably lower the domestic prices of produces grown by Thai farmers.
• Due to different inspection methods and practices in importing vegetables and fruits in individual precincts of China , the trade expansion by Thailand has to be done on a case by case basis. In addition, the exporters complain that even though China has brought the tariff rate down to 0%, there is still an obstacle in trading with China . For instance, China collects a 13% value added tax for the imported goods, but does not apply the same practice to the common goods produced in China .
• The standard of a trading firm to be given a permission for import is high; as a result, it must be mainly done through Chinese firm. At the moment, China has released a new law on trade which allows small and medium Chinese exporters/importers to directly operate their own import/export business without necessarily going through the trading firm. This law has come into force since July 1 st , 2004 onwards.
• The strictness and inspection quarantine duration for vegetables and fruits takes too long; as a consequence, the commodities become decayed. Before importing goods, a company is required to apply for an Inspection Quarantine License from the Ministry of Quality Control and Quarantine in Beijing . When the goods imported from any precinct arrive at a port, they must be re-inspected. Furthermore, durians and mangoes to be imported must come from the registered farms only. Presently, there are 400 farms being registered with the Department of Agriculture. In connection with this matter, a MoU regarding cooperation in inspection quarantine and plant quarantine was signed under the condition that an Inspection Quarantine License is required in advance in Beijing . If the imported goods are relevant to the documents in the license, then, China will immediately release them, but still keep some as samples for inspection. However, both parties agree to adjust the protocol on durian and mango. During the improving process, the existing protocol is in use. China readily opens arms to accept the registered Thai durian and mango farm lists on which can be added more any time. Now, Thailand is accelerating to register farm lists, including covering other necessary goods in the protocol.

Source:  The Impact of Opening Free Trade on Vegetables and Fruits between Thailand and China, www.scb.co.th/LIB/th/ article/ktb/data/k8-42.html; The Latest Situation of Opening Free Trade on Vegetables and Fruits between Thailand and China, www.dtn.moc.go.th ; The Problems of Reduction of Tariffs on Vegetables and Fruits, www.dtn.moc.go.th/fileroom/ cabdbe/drawer44/general/data