No retaliation for Malaysia auto tariffs: Thai official<\/p>\n
Dow Jones, Bangkok<\/p>\n
The Thai government won't take any retaliatory steps against
\nMalaysia for its delay in implementing import tariff cuts for
\nautomobiles and parts required under the Asean Free Trade Area,
\nor AFTA, agreement, a senior official at the Commerce Ministry
\ntold Dow Jones Monday.<\/p>\n
Although representatives from Thailand's private sector have
\nurged retaliation since Malaysia's delay could hurt Thailand's
\nautomotive industry, the Thai government is pleased that Malaysia
\nhas proposed measures to mitigate the ill effects of the delay,
\nthe official said.<\/p>\n
"Retaliation doesn't seem necessary now as Malaysia has taken
\npositive steps. We're negotiating on details of (the compensatory
\nmeasures)," said the official, who is involved in the AFTA
\nnegotiations.<\/p>\n
Thailand and Malaysia are members of the Association of
\nSoutheast 10-member Association of Southeast Asian Nations, or
\nAsean.<\/p>\n
Malaysia has delayed the cutting of automotive tariffs that is
\nrequired under the AFTA rules by two years until 2005.<\/p>\n
Under the AFTA plan, regional tariffs on motor vehicles
\nimported by Asean's six original members - Malaysia, Indonesia,
\nThailand, Brunei, the Philippines and Singapore - are set to fall
\nto below 5 percent next year.<\/p>\n
Malaysia received an extension after saying it wanted to give
\nthe local car market more time to prepare for competition after
\nthe country's economy was hurt by the 1997-98 financial crisis.<\/p>\n
Thailand has a sizable car manufacturing sector and wants
\ncompensation for the impact that the delay will have on its
\neconomy.<\/p>\n
At an Asean Economic Ministers meeting in Brunei Sept. 12-15,
\nMalaysia pledged it would come up with several measures to
\nrespond Thailand's request for compensation.<\/p>\n
According to an earlier statement issued by the Thai commerce
\nministry, the proposed measures included plans to speed up cuts
\nin Malaysian import tariffs on cars with engines bigger than 2000
\ncubic centimeters, to import more rice from Thailand on a
\ngovernment-to-government basis, as well as to import more car and
\nmotorcycle parts.<\/p>\n
Malaysia will also negotiate a long-term contract to buy sugar
\ndirectly from a state-run Thai company. Like other importing
\ncountries, Malaysia currently buys Thai sugar through
\ninternational trading firms.<\/p>\n
The ministry official said since Malaysia was offering a
\ncompensation package that mostly involved industries other than
\nthe auto sector, some of those affected in the auto sector won't
\nbe satisfied.<\/p>\n
The government will continue monitoring the situation to see
\nif it would be necessary to pursue further compensation targeted
\nat getting relief for those affected in the auto sector, the
\nofficial said.<\/p>\n
Such compensation, however, will also depend on further
\nnegotiations with Malaysia, the official said.<\/p>\n
Separately Monday, Thai Chamber of Commerce Secretary-General
\nVachara Punachet said he wanted the government to retaliate in
\nindustries in which Thai demand plays a big enough role, and to
\npressure Malaysia into soon agreeing to implement the auto tariff
\ncuts as required by the AFTA agreements.<\/p>\n
He, however, denied a report in a local English-language
\nnewspaper, Business Day, which quoted him as suggesting a ban on
\nimports of Malaysian palm oil.<\/p>\n
"I didn't said palm oil is a (viable) measure... I think
\nMalaysia wouldn't be affected by a Thai ban (as Thailand doesn't
\nimport much Malaysian palm oil)," he told Dow Jones in a phone
\ninterview.<\/p>\n
Thailand imports limited amounts of Malaysian palm oil. In the
\nfirst seven months of this year, Thailand imported just 2,400
\ntons of palm oil from Malaysia, compared with China, which
\nimported 1.05 million tons, India, which imported 979,360 tons,
\nand Pakistan, with 557,830 tons.<\/p>",
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