A newly enforced US law could become another barrier blocking Thai exports unless shippers adjust to qualify under the rule's stricter labour standard, say industrialists.
US President Barack Obama endorsed the Trade Facilitation and Trade Enforcement Act earlier this year, bringing it into force.
The law is a broad update of a US trade law that will allow a ban on any imported good produced by convicts or forced or indentured labour, said Vallop Vitanakorn, vice-chairman of the Federation of Thai Industries.
Mr Vallop told the Bangkok Post the law is meant to eradicate all loopholes created by previous US trade laws such as the Tariff Act of 1930, which prohibited imports of goods that were suspected to be produced partly or wholly by convicts or forced or indentured labour, but had an exemption for goods where US demand outstripped domestic production.
In contrast, the new trade law eliminates such exemptions, forcing all exporters to upgrade their labour standards immediately to avoid being banned by the US.
The US is one of Thailand's top three export markets. Exports account for more than 60% of Thailand's GDP.
The move was seen as a more aggressive US approach in addressing the issues of forced and child labour used in the global supply chain.
Thai exporters have been hit hard the past few years, especially in the seafood sector after the US downgraded Thailand from the Tier 2 Watch List to the lowest level, Tier 3, in its 2014 Trafficking in Persons (TIP) report. The EU also issued a yellow card to Thailand for accusations of Illegal, Unreported and Unregulated (IUU) fishing here.
Mr Vallop said the new law will have a broader effect on Thai exports than any other trade barrier because it covers all goods.
He said Thai labour-intensive industries such as garments will be affected the most because they rely heavily on migrant workers, whose use might be considered unacceptable under the new law.
Although these migrant labourers are working in Thailand legally, some working processes such as the way Thai employers pay their wages or the way they live in Thailand could be seen as low standards, triggering an import rejection.
Major Thai companies have started to adjust their practices, especially food-related industries, to avoid a US import ban.
Betagro Group, one of the country's leading poultry breeders and agribusinesses, has improved its poultry raising process at all of its contracted farms throughout the supply chain.
Rungroj Tuntivechapikul, vice-president for corporate human resources at the company, said it set up the Betagro Labour Standard to be applied to all supply chains.
The company also recently coordinated with local administrative authorities to check up on all contracted poultry farms in Lop Buri province, the hub of the industry in Thailand with over 300 poultry farms in the province.
"Our new supply chain standard meets not only Thai labour law requirements but also international standards," he said.
Another example was Mitr Phol, Thailand's top sugar producer, which wanted to retain its position as the industry leader by pursuing Bonsucro certification so that it would be better accepted on the global market.
The company finally was awarded the Bonsucro certificate this year, making it one of the Thai industry leaders guaranteed to produce using higher labour standards.
Bonsucro is a global multi-stakeholder organisation founded in 2008 to oversee global sugar industry standards. It awards certificates to members who meet its stringent criteria, which focus on human rights, social responsibility and economic viability.