The EU wants to impose a 53 per cent tax on all processed chicken imports that fall outside of permitted quotas for each country.

The duty for products within the quotas would be unchanged, at 10.9 per cent for cooked chicken, 15.4 per cent for salted chicken and 8.5 per cent for turkey.

But a substantially higher tariff on cooked chicken imports above quota levels will have a significant impact on restricting growth of Thailand's EU exports. The country, which is the biggest export of cooked chicken to the EU, has focused on cooked meat since fresh products were banned in 2004 following the outbreak of bird flu.

Jean-Jacques Bouflet, trade counsellor at the Commission's delegation in Thailand, said: "Due to a considerable export surge in recent years from a number of countries including Thailand we need to control future expansion."

Thai cooked chicken exports in the EU market have grown by 74 per cent from 61,105 tonnes in 2003 to 106,503 tonnes in 2005. In terms of value, they increased by 54 per cent during this time, says the EU.

The quotas, which are in line with the World Trade Organisation's trade rules, will not be announced until the figures are mutually agreed. Talks on the issue are scheduled to take place next month in Brussels.

According to WTO rules the negotiations could lead to compensation for Thailand for loss of trade resulting from the changes, noted the EU.

"The European Union is within its rights to alter its import duty regime provided we abide by our liability for compensation. Any possibly compensation will depend on the size of quotas negotiated with our counterparts and any likely impact on future trade prospects," Bouflet said.

But a statement submitted by Thai farmers and producers said: "The new tariff for these products will be as high as 53 per cent, which has never been expected by any WTO members, especially, by those developing countries, that have been dependent upon agricultural exports."

The Thai farmers said the tariff increase will destroy their livelihood and violate the notion of free trade.

A senior commerce official told local media that Thailand would negotiate for the EU to allow Thailand a quota of 10,000 tonnes per month, which equals the annual export total currently.

The five biggest exporters to the EU are Charoen Pokphand Foods, Sun Valley (Thailand), Betagro, Saha Farms and Grampian Foods Siam.