The automotive sector has emerged as the most contentious issue ASEAN’s move to accelerate economic integration as Malaysia insisted on restricting imports of motor vehicles not to exceed 10 percent of its total production, an internal policy that irked other ASEAN car producers such as Thailand, Indonesia and the Philippines.
An ASEAN senior economic official, who was privy to the ASEAN Economic Ministers Meeting in Cebu last week, said that ASEAN countries expect a strong debate on the automotive sector next year.
The source said that while Malaysia already reduced its extended 20 percent tariff protection on automotive imports to 0-5 percent starting this year, it also imposed this non-tariff barrier.
Malaysia, the source said, does not even acknowledged the 10 percent import volume restriction as a non-tariff barrier.
Malaysia was not even clear as to when they are going to lift the 10 percent import volume restriction. Under the newly signed amended agreement for the Integration of Priority Sectors, ASEAN countries agreed to bring down tariffs to zero on all products and eliminate all non-tariff barriers under the 12 priority integration sectors by 2007.
"This is going to be a very contentious issue next year," the SEOM official said.
It could be recalled that ASEAN countries allowed Malaysia to put the automotive sector under the sensitive list of the Common Effective Preferential Tariff, the vehicle that implements the trade liberalization in the region.
But at that time, the source said, there was no automotive producer yet in the region except for Malaysia, which is developing and promoting its national car — Proton Wira. (BCM)
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