KL scorns damage claims for car tariff delay

KL scorns damage claims for car tariff delay

KUALA LUMPUR (Reuters): Malaysia on Thursday dismissed
regional neighbors' complaints about its plans to delay import
tariff cuts on cars, adding critics had scant cause for
compensation.

Without referring by name to Thailand, with whom Malaysia is
in dispute on the car tariffs issue, Malaysian Trade Minister
Rafidah Aziz said countries seeking redress for the planned two-
year delay sold very few vehicles in the country.

"Really, they do not have ground to stand on, they do not have
significant supply," Rafidah said in a speech to Malaysian
business executives.

"They should not be aggrieved really if we delay by two years.
They are not really principal automobile suppliers to Malaysia,"
she said, adding Japan and South Korea held far bigger shares.

Malaysia, Thailand, Brunei, Indonesia, the Philippines and
Singapore have an Association of South East Asian Nations Free
Trade Area (AFTA) agreement to slash tariffs on cars and car
parts to a maximum five percent by the end of 2002.

But Malaysia persuaded its neighbors to grant it a two-year
reprieve on cutting car tariffs, which can be as high as 300
percent on imported vehicles and about 42 percent on average, to
protect its national car Proton.

"The reason is because of the recession, that's affected very
badly the automotive industry. We want to ensure our automotive
industry gets back on its feet," Rafidah said.

Last month, Thailand gave Malaysia until August 10 to come up
with a list of trade concessions to compensate for its decision
to retain the tariffs.

Boontipa Simaskul, head of Thailand's Department of Business
Economics, said the government would announce a retaliation plan
after October 16 if it was unsatisfied with Malaysia's proposals.

The Association of South East Asian Nations groups the
countries of Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand, and Vietnam.