AFTA must not be too liberal: Mahathir
AFTA must not be too liberal: Mahathir
Associated Press, Bangkok
Malaysia's prime minister on Saturday urged Southeast Asia's free trade group to guard against becoming so open that it falls prey to global business poachers.
"We have to be pragmatic in our policies rather than seeking for the ideal," Prime Minister Mahathir Mohamad said in a speech to Thai and Malaysian businesspeople.
Malaysia is committed to the ASEAN Free Trade Area but "we may have to consider if there are rules that need to be examined in AFTA" to protect the interest of its members, he said.
Mahathir arrived in Thailand on Friday evening for a three-day trip, his first official foreign visit since announcing last month that he plans to step down next year after 21 years in power.
The imposition of protective tariffs by the United States shows that even developed economies recognize the need to protect their domestic industries, he said.
AFTA groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. They have pledged to reduce import tariffs to a maximum 5 percent by 2003 but will allow the four poorest members until 2006.
"I am not advocating protectionism but (trying) to ensure that industries that need to be nurtured are not on the contrary forced to be closed down. There has to be some adjustments," Mahathir said without elaborating.
Thailand and Malaysia are locked in a dispute over Kuala Lumpur's decision to delay the agreed tariff cuts for automobiles for another two years in a bid to protect its national carmaker Perusahaan Otomobil Nasional Bhd., known as Proton.
"We are not being unduly protective against our ASEAN neighbors, but it is not ASEAN neighbors we are worried about, it is foreign countries taking advantage of AFTA for their own purposes," Mahathir said.
Thailand, the region's biggest car exporter, is seeking compensation from Malaysia.
Other AFTA members say Thailand is defending its glass and petrochemicals industry and the Philippines its cement industry.
Mahathir said Malaysia is on its way to keep its AFTA pledges. He said 90.82 percent of Malaysia's imports have duties between 0-5 percent, including 60.25 percent that have no duties at all.
Mahathir said Malaysia is set to achieve economic growth of at least 3.5 percent this year and praised the effectiveness of his government's policy of keeping the ringgit pegged at 3.80 to the dollar, saying it kept the economy competitive.
Mahathir, who is also the finance minister, said he is not ruling out appointing a new minister to take over the portfolio before his planned departure from politics. "I'm sorry I cannot tell you who I have in mind," he added.