Free trade agreement could prevent Thai car sales to Japan
Free trade agreement could prevent Thai car sales to Japan
Jeerawat Na Thalang, Asia News Network, The Nation/Bangkok
Thailand may not be able to sell cars to Japan after the Thai-
Japanese trade deal is finalized because Tokyo is unlikely to
lift barriers against imported vehicles, an executive from Ford
Motor Co said.
Stephen Biegun, vice president of Ford's international
government affairs division, said Japan had a broad range of non-
tariff barriers in spite of low import duty rates.
"I don't think you (Thailand) can sell one more car to Japan
as a result of the Thai-Japanese free-trade agreement. But I
think Japan will sell lots of cars to Thailand," he told The
Nation during a recent interview in Bangkok.
"Collectively in the Japanese market, 4 percent of cars sold
have non-Japanese nameplates. You can't go to the market even
with zero tariffs. There are non-tariff barriers at every turn,"
he said.
The Japanese government is currently considering changes that
could result in more non-tariff barriers. These include the
registration of non-Japanese companies and an implementation of
new standards on passenger and pedestrian protection.
"Both of these will definitely drive non-Japanese companies
out of the market," said Biegun, who served as a national
security adviser to U.S. Senator Bill Frist before joining Ford
last year.
Thai and Japanese officials are currently trying to sort out
their differences on automotive liberalization under a planned
FTA.
Tokyo's demand for Thailand to lower tariffs on auto parts and
luxury vehicles remains a critical sticking point in the
negotiations.
Compared to the U.S.-Thai FTA, which will be comprehensive,
the Japanese come from slightly different perspectives, Biegun
said.
With regard to Thai-U.S. FTA talks, he acknowledged the
tension facing negotiators.
"Both sides need to ease off to let the negotiations do the
work," he added.
Regarding some sensitive issues in the talks, he expressed
optimism that the pressure might ease after the conclusion of the
World Trade Organization's Doha round, which deals with a number
of similar trade-related issues.
Ford has a vested interest in Southeast Asia, with production
facilities in Vietnam, the Philippines, Malaysia and Thailand.
"We are betting on the ASEAN Free Trade Area (AFTA) model and
also on trade relations among ASEAN nations. We are looking at
complimentarily producing different parts in different ASEAN
countries. We are the biggest cheerleader (of ASEAN economic)
integration because we are the biggest beneficiary," said Biegun.
He said Ford (Thailand) sold 20,000 vehicles to 130 countries
from the Kingdom largely as a result of AFTA agreements.
Asked why Ford hasn't set up a production facility in
Indonesia, he said: "It's because of the legacy of the past."
He explained that the previous Indonesian government very much
focused on the national car approach, as it was a leading family
business.
"Therefore, it makes it very tough for competitors to
succeed."
However, investors have recently become very interested in
Indonesia as the current government has adopted a more liberal
policy.
For instance, Indonesia is a coordinating country working on
an automotive corporation, one of 11 sectors to be created for
the ASEAN Economic Community in 2020.
"It's not too late to go to Indonesia. The present Indonesian
government has the right policy, but it takes time," he added.