Polishing away a big blemish

WEEKEND BRUNCH
Polishing away a big blemish
By Nophakhun Limsamarnphun
The Nation
Published on May 9, 2009

Anthony Brooke, a veteran in the Thai gem and jewellery industry, is trying really hard to alleviate the negative impact the US Tom Lantos Block Burmese JADE Act is having on local exports


Anthony Brooke, 49, deputy director for public relations of the Thai Gem and Jewellery Traders Association, is working alongside other associations and government officials to mitigate the negative impact of a US law banning Burmese gemstones on Thai exports.
A 28-year veteran in the industry with his own jewellery trading business in Thailand, Brooke says the US is currently one of the largest importers of Thai gems and jewellery, accounting for 13 to 25 per cent of total shipments over the last three years.

However, the US economic recession and recent enforcement of the Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) Act has led to a 40-per-cent year-on-year plunge in Thai shipments in the first quarter of this year.

The Foreign Ministry is working closely with the association to help negotiate a review of the law, which was put into force in September last year, since it is having a negative impact on the export of Thai gems and jewellery to the American market.

"Besides the US economic recession, the export slump has been compounded by the ban on [Burmese] ruby," says Brooke, who also runs a gem and jewellery outlet in Bangkok.

Rubies and other Burmese gemstones account for about 20 per cent of the raw materials used by the Thai jewellery industry.

"There is also a big impact on employment in Thailand as many operators have had to lay off workers. Since last year, up to 100,000 people have lost their jobs, with significant losses in Mae Sot and other border towns where there used to be large numbers of gem-cutters, polishers etc," he adds.

According to Brooke, the industry in Thailand employs 1.1 million people, with more than 700,000 working in the upstream sector.

Exports of gems and jewellery totalled US$8 billion (Bt279 billion) in 2008, making the industry one of the country's top-three foreign-exchange earners.

"Though many members of our association have had to lay off staff [as a result of the export slump], they are still trying to keep as many skilled workers as possible.

"Given the Burmese-ruby ban [in the US market], there remains the negative impact on Thai exporters: there is no alternative source of raw materials yet," he says.

However, Chinese traders will gain, because they have become more active in buying rough gemstones from Burma such as rubies and jade as raw materials for domestic sales.

Brooke is concerned the European Union may also consider slapping a ban on Burmese gemstones in its vast market.

"This kind of economic sanction is similar to what the US did to Cuba, aiming for a regime change, but it has yet to see results after 47 years," he says.

In addition, the United States' Tom Lantos law is not consistent with the World Trade Organisation's provisions on the origin of products since Burmese gemstones used in Thai jewellery undergo substantial transformation and therefore should be regarded as Thai products.

In his opinion, the US law is aimed at punishing the Burmese junta but has in fact hurt underprivileged Burmese people working in the jewellery industry near the Thai border.

"Small Burmese gem-traders have decided to sell more rough gemstones to their government, which then auctions them off to foreign buyers. In other words, the ban has had an opposite effect.

"It is depressing the prices for small Burmese operators while the Chinese are gaining from the situation. Politically, the ban has pushed the Burmese regime closer to China, both economically and militarily," he says.

In coming years, however, China is expected to be the next big market for precious stones and jewellery due to its unrelenting economic growth and fast-expanding middle class. With the world's largest population at 1.3 billion, China will soon be trailing closely behind the US and European markets in terms of demand for gems and jewellery, he adds.