Thai-M'sian talks on auto tariffs and quotas
Thailand and Malaysia will meet this week in a bid to settle a prolonged controversy on tariff reduction for completely built-up vehicles under the Asean Free Trade Area Agreement (Afta).
Although the two countries have promoted the auto industry, they have faced cross-export difficulties due to high tariff barriers. Malaysia has called upon Thailand to reduce the import tariff on completely built-up (CBU) autos to between zero and 5 per cent, its cars having been subject to Thai duty of 60 per cent. The ousted Thaksin Shinawatra government implemented the high import tax on Malaysian cars after the neighbour imposed quota restrictions on imported CBUs, including those from Thailand. Thailand and Malaysia been involved in marathon talks on tariff reduction in the automobile industry. Malaysia wants to protect its national car manufacturing policy by hampering market access of imported vehicles through its import quota barriers. Pasit Poomchusri, assistant director-general of the Trade Negotiations Department, said the two countries would have to revise their import barriers because the Thai government has changed. The Thai side will demand that Malaysia lift its import quota on car exports from the Kingdom. "If Malaysia does not accept the Thai proposal, the problem will not be solved. We want to see reciprocal practice: if Malaysia eliminates the quota, Thailand will also bring down its tariff to 5 per cent under the Afta agreement," he said. Malaysia says the import quota is a normal practice used for protecting local auto manufacturers. Thailand is also planning to call for compensation from the Philippines and Indonesia after they extended the time for tariff reductions on Thai rice and sugar. Under Afta, both countries have put rice and sugar on their sensitive lists, which will extend the time to bring down tariffs to between zero and 5 per cent, instead of maintaining the normal track in which tariff rates should have been reduced since 2004. The practice has created export losses for Thailand because it is unable to enjoy low tariffs. In exchange, Thailand will demand that Indonesia open more fishery concessions for its trawlers and will seek a higher sugar import quota from the Philippines.
Petchanet Pratruangkrai The Nation
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