OPINION

Shining a little light

Re: "Thai economy put at risk by surge in zero-dollar exports", (Business, April 11) & "Shedding light on the US solar probe", (Business, Oct 19, 2024).

Everyone is in a tizzy about Do all Trump's tariff edicts. Here's a view from someone who has dabbled with solar power for the past 50 years: The top nine makers/exporters of storage batteries are all in Asia.

The top four: China / Cambodia /VN / Thailand in that order. Number 10 is the EU.

The top four battery-making countries worldwide in terms of new US (+ existing) Trump tariffs, are the same four Asian countries.

However, that's not necessarily bad news for Thailand.

When Americans want good quality batteries for their alternative energy set-ups, they often don't mind spending extra.

In other words, if they need a high-end lithium battery that used to cost $1,100 during Mr Biden's presidency, and now costs $1,400, the consumer will still likely buy the item for a higher price.

Note: the recent Wall Street meltdown freed up $6.5 trillion in cash! What's their alternative? Battery makers in the US (non-tariffed) buy many of their components from China.

Plus, US workers get four times higher wages than Chinese workers… so the same type of battery made in the US would still probably cost more than the same-rated Asian-made battery.

Therefore, Thailand is in a rather good situation, and should keep making solar-related products, and the heck with the US.

Solar is the wave of the future, and forget Mr Trump -- who thinks horse-drawn carriages with V8 gas-guzzling engines heating his KFC bucket in the rear compartment are the future.

Speed bumps for all

Re: "Safety drive doesn't deliver", (Editorial, April 10).

I am now in a small village in Khon Kaen where I will stay until Songkran is over. What I found amazing is this small village has actually installed several speed humps along the main road.

They actually do slow speeding vehicles and bikes down.

When I am in Pattaya, I stay on the 3rd road and believe me the speeding idiots use it like a race track.

Why on earth can't the powers that be do the same.

Service sector windfall

Re: "90-day pause will help talks", (BP, April 11).

Every country, including Thailand, is so focused on negotiations for a trade deal with the USA that they have overlooked the fundamentals that go into trade surplus and deficit calculations used by the USA, ie, only physical goods are counted. This exclusion obscures the true economic balance of trade between the USA and other nations to the benefit of the USA. But in today's digital economy, one of the largest money-makers for the USA is in the service sector: financial fees, franchise fees, licensing and royalty fees, and intellectual property fees.

US economists claim these items are not included because they are much harder to measure and were not included in historical data. In reality, they are not included because they would reduce the trade deficits of the USA vs trading countries.

To achieve a profit of $1 for a US company exporting hard goods to Thailand, an export volume of $8 is required based on the assumed profit margin. In contrast, a US company selling services or collecting fees in Thailand only needs $2.80 in revenue to earn the same $1 profit. This implies that for equivalent profit, $1 of services is equal to approximately $2.80 of hard goods exported to Thailand.

Royalty and marketing fees for franchisees typically range from 8% to 10% annually, or about US$$1.5 billion in service revenue to the US companies. Additionally, the initial franchise start-up fees apply, and a significant portion of the raw materials used in these food businesses are imported from the United States. Applying the revenue equivalence factor derived above, this franchise fee sector alone is equivalent to the US exporting $$4.2 billion of hard goods to Thailand. None of this is counted in the US-Thailand trade balance calculation by the USA.

Here are some more industries that are left out and are much bigger than convenience stores and quick-service restaurants: fees paid to pharmaceutical companies, software licences, cloud platform service fees, computer operating systems, and embedded software (zero tariff category). When we include these items, we may just be barely above water or even in the red in the trade balance against the USA. Can I suggest the government study this assertion? We have 90 days to negotiate.

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