General Motors says Asia still protective

General Motors says Asia still protective

MANILA (UPI): U.S. automotive giant General Motors Corp.
Saturday criticized persisting protectionism in some Asian
countries, blocking Western car manufacturers from tapping the
region's potential markets.

GM chief economist G. Mustafa Mohatarem said most of Asia's
booming car markets remains untapped, except for Japan and South
Korea, frustrating American car manufacturers' aim to cash in on
the region's rapid growth.

"The problem in Asia Pacific is that each country has a large
level of protection," said Mohatarem, one of some 550 top
corporate officials attending the Asia Pacific Economic
Cooperation Business Forum in Manila.

"It is very difficult for us (western carmakers) to achieve
economies of scale," he told journalists.

Mohatarem cited China as a possible "explosive market," with
the number of affluent Chinese amassing wealth and property
increasing as rapidly as the economy grows.

He urged Asian countries to adopt policies in line with
regional trade blocs' goals to liberalize trade and investments,
including APEC and the ASEAN Free Trade Area.

"If they go in the direction of AFTA goals, there will be a
substantial decline in car prices," he said. "But if they choose
to remain to serve country-based market, this will hold back
growth (in the industry.)"

AFTA aims to reduce tariffs by the year 2003 among the seven
members of the Association of Southeast Asian Nations, which are
the Philippines, Vietnam, Indonesia, Thailand, Malaysia, Brunei
and Singapore.

Mohatarem also criticized an Indonesian car policy giving
preferential tariff exemption to Kia Motors Corp., which has a
joint venture with President Soeharto's son.

GM hopes the dispute would not reach the World Trade
Organization, which implements the General Agreement on Tariffs
and Trade.

"I'd rather have it settled now because this is when the
markets are growing and this is when we have to make investment
decisions," he said.

The United States, European Union and Japan threatened last
month to file a complaint against the Indonesian national car
policy favoring vehicles produced by Kia Motors.

The duty-free status of Kia Motors already has forced GM to
stop one of two production lines as manufacturing became too
costly, making Indonesia a tough market for Detroit's largest
carmaker.

Mohatarem expressed hope U.S. Trade Representative Charlene
Barshefsky could convince Indonesia its car industry will not
benefit from a policy of protectionism amid a booming global
market.

"We certainly hope that Amb. Barshefsky will be able to
persuade the government of Indonesia that (the policy) is not in
their long-term interest," he told journalists.