Thailand Says ‘no’ To Lower Tariffs On Malaysian Cars

[Jai Dee]

Thailand ‘no’ to lower tariffs on M’sian cars

KUALA LUMPUR: Thailand will not lower its import duty on cars from Malaysia, saying that it will maintain the current rate of 20% even though Malaysia has reduced import duties of completely built-up (CBU) cars from Asean to 5%.

Director-general of the Fiscal Policy Office Naris Chaiyasoot, in a news report in the Bangkok Post yesterday, said that keeping Thailand's import duty for Malaysian CBU cars at 20% was to counter the imposition of non-tariff barriers.

He said the non-tariff barriers were Malaysia's demand that car manufacturers register for approvals on automobile imports.

''This action does not comply with the Afta (Asean Free Trade Area) agreement,'' Naris said in the report.

''So the ministry will not lower import tariffs on (Malaysian) CBU kits to 5% as agreed under Afta.''

Under the National Automotive Policy, Malaysia said it had complied with the Afta agreement by cutting its import tariffs on automobiles to 5%.

Naris said in the report that the lowering of Malaysian import duties was expected to have some effect on Thailand's automobile exports but they were likely to be minor as Japanese car manufacturers had bases in several Asean countries including Thailand and Malaysia.

Afta requires the six original Asean members – Thailand, Malaysia, Singapore, the Philippines, Indonesia and Brunei – to cut import tariffs to zero by 2010.

Analysts are uncertain what the non-tariff barriers mentioned in the story were but suspected that the need for approved permits might be the sore point.

“There is a need for further clarification on this as the higher import duty on Malaysian cars will affect the sales of cars by Malaysian companies to Thailand,'' said an auto analyst with a local broking firm.

Source: Malaysian Star - 20 June 2006