Malaysia is calling for a review of plans to cut tariffs across south-east Asia, claiming that lower tariffs will affect its car production, particular the Proton series.
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The south-east Asian country has been given until 2005 to bring tariffs on imported cars down to between zero and 5%, two years later than other key members of the ASEAN Free Trade Area (AFTA).
Under its rules, cars produced in any country belonging to the Association of South-East Asian Nations (ASEAN), with a minimum 40% local content, are entitled to be exported to another ASEAN country attracting 0-5% import duty.
Malaysia has the biggest car market in ASEAN but prime minister Mahathir Mohamad said: “Our national car the Proton has more than 90% local content. It may not be able to compete with cars assembled in other countries which have 40% local content.”
However, he said Malaysia had no intention of resorting to non-tariff barriers for foreign cars after 2005.
