M'sia given August deadline in tariff row
M'sia given August deadline in tariff row
BANGKOK (Reuters): Thailand said on Tuesday it has given Malaysia until Aug. 10 to come up with a list of trade concessions to compensate for Kuala Lumpur's decision to retain tariffs on automobile imports.
A trade protocol agreed last November gave Malaysia until July 19 to negotiate with Thailand on non-monetary compensation. After that, it must offer Thailand a proposal. If Thailand does not accept the offer, it can then take retaliatory action.
Boontipa Simaskul, head of Thailand's Department of Business Economics, told reporters the government would announce a retaliation plan by mid-October if it was not satisfied with Malaysia's proposals.
"We are now waiting for Malaysia to reply on the compensation proposal," Boontipa said. "If we are not satisfied with the proposals, we will retaliate after October 16."
Under the Association of Southeast Asian Nations (ASEAN) Free Trade Agreement (AFTA), Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand are committed to slashing tariffs on automobiles and automobile parts to a maximum five percent by the end of 2002.
But Malaysia persuaded its fellow member countries to grant it a two-year reprieve on cutting the tariffs, which are as high as 300 percent on imported automobiles, to protect the market for the Proton, its national car.
Thailand's auto industry stands to be hardest hit by the Malaysian delay, and so under an AFTA protocol Malaysia has to agree non-monetary compensation with its northern neighbor.
AFTA's conflict resolution procedures give disputing countries 180 days from the day talks start to agree on compensation. Talks between the two countries started on January 19.
Malaysian International Trade and Industries Minister Rafidah Aziz told reporters last week both sides had been unable to find a solution to the question of non-monetary compensation.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.