Malaysia stands firm on delaying auto tariff cuts
Malaysia stands firm on delaying auto tariff cuts
KUALA LUMPUR (AP): Malaysia on Thursday reaffirmed its promise to lift tariffs on automotive products to Southeast Asian countries by 2005, two years later than agreed to under a regional free-trade pact.
The stand has triggered demands for compensation by Thailand and Indonesia for dragging its heels on implementation of the agreement.
International Trade and Industry Minister Rafidah Aziz said Malaysia would include two types of auto products - completely- built-up and completely-knocked- down - in the agreement, the Bernama national news agency reported.
But Malaysia said the tariff reduction target of 2003 on those products wouldn't be met, she was cited as saying.
The Association of Southeast Asian Nations, which comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, is working toward a free trade area by 2003.
Malaysia has sought to defer lifting tariffs on its auto products until 2005, arguing that its industry needs more time to restructure and become more competitive.
Thailand - a big automaker - and Indonesia want compensation for lost market opportunities cause by Malaysia's deferment
Rafidah said that Malaysia would only compensate other nations if they could quantify the injury to their exports, Bernama reported.
She said that Malaysia and Indonesia had recently reached an agreement on compensation, which would take the form of unspecified collaboration between the countries' auto sectors.
No agreement had been reached with Thailand after four meetings between officials, and fundamental differences remain between them, Rafidah was cited as saying.
She said 96.6 percent of Malaysia's products were covered by the free-trade agreement. Of those, 91.7 percent had tariffs of between 0 and 5 percent.
Rafidah said the average tariff rate for Malaysian goods covered by the agreement was 2.8 percent in 2000, and this would be reduced to 2.59 percent in 2001, 2.45 percent in 2002 and 2.07 percent in 2003.
This was below the average combined tariff rate for Asean's six original members, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The average tariff rate for those countries was 3.52 percent in 2000 and was expected to be reduced to 3.18 percent in 2001, 2.9 percent in 2002 and 2.4 percent in 2003.