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.