M'sia to wait before revisiting auto tariff dispute with Thai
Malaysiakini
Sep 25, 2006

Malaysia will wait for a new government to take power in Thailand before pressing for fresh negotiations on a lingering bilateral vehicle import tariff dispute.

Trade minister Rafidah Aziz said it was best to let a new Thai government be formed before communications resumed, the Sunday Star newspaper reported.

The previous Thai government had been determined not to cut the tariff to five percent from 20 percent on vehicles produced in Malaysia, she was quoted as saying.

"That was before ... now it is different all together (because of the coup). So, I am waiting," Rafidah was quoted as saying by Bernama news agency.

Thaksin Shinawatra was outsed as Thai prime minister in a bloodless coup last Tuesday evening by a military junta that says it is drawing on a shortlist of four, which includes Supachai Panitchpakdi, 60, former director-general of the World Trade Organisation, to replace him.

Thailand is Asean's main automotive manufacturer, focusing chiefly on pickup trucks, while Malaysia is the region's largest passenger car market.

The powerful trade minister earlier in the week had threatened to punish Thailand for its refusal to slash the tariff on Malaysian cars.

"If Thailand, for example, does not comply with what is provided for, we will be forced to retaliate and I am now looking for my officers on measures to retaliate," Rafidah had said.

Remove all restrictions

Rafidah's comments came after bilateral negotiations on Tuesday in Kuala Lumpur failed to achieve a result, with Thailand sticking to its position.

Malaysia insists that under an Association of Southeast Asian Nations (Asean) regional free trade deal, its auto exports to Thailand should only carry a five percent tariff.

But Thailand has rebuffed the argument, saying parties are entitled to tariff cuts under an Asean Common Effective Preferential Tariff only if they remove other restrictions.

These include Malaysia's controversial import permits scheme, which Bangkok sees as a non-tariff barrier to trade.