ABSTRACT
This chapter is a case study analyzing the relationship between trade policy and renewable resource utilization. The objective of this research is to discover if the trade policies currently employed in the fisheries industry of Thailand are appropriate and if the use of domestic resources is efficient. The policy evaluation tools applied to serve this purpose are domestic resource cost and revealed comparative advantage models.
Overall, the results of the study indicate that the fisheries industry in Thailand is economically advantageous as a foreign exchange earner, net of domestic resource cost, as well as in terms of its relative export performance in the international market. The protection system with regard to the fisheries industry, however, does not provide neutral incentives to the production or processing sectors. In fact, a penalty of negative protection still exists in this industry.
The growth of Thai fisheries’ exports, therefore, is not attributable to the protection policy but rather to the potential of the industry in terms of comparative advantage in resource use. It is this coordination of the industry with classical economic theory that enables it to survive and succeed at this time.
The policy recommendations of this chapter urge efforts to identify and measure the market failures that impeded industrialization and to overcome these failures. The economic incentive system should be rationalized and strengthened to offset the effects of negative protection. The problem regarding the management of the fishery resources in the future should also be urgently taken into consideration in order to maintain the degree of comparative advantage that the Thai fisheries industry holds in international trade.
