The head of the Thai subsidiaries of Ford was quoted on Tuesday as saying that a recently concluded Thai-Japanese free-trade agreement could hurt the company and force it to reconsider future investment in Thailand, the Associated Press (AP) reported.
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A tariff reduction formula for the import from Japan of completely built-up cars with engines of 3,000 cubic centimeters or more would place Ford at a disadvantage and put into doubt the viability of future investments, John Felice, president of Ford Operations (Thailand) Co. Ltd., was quoted as saying by the state Thai News Agency, AP added.
AP said Felice was quoted by the news agency as saying that while he had not yet confirmed the details of the FTA, expected to be signed in April next year, but its reported terms would prompt Ford to reconsider its investment strategy in Thailand’s automobile sector because tariff privileges that now constitute an incentive for investing in Thailand would be lost. The FTA is expected to come into effect around September next year.
“The tax policy of Thailand at the moment bodes well for investment … as Ford realises the potentials of the country,” he was quoted saying, according to AP. “This environment would be altered significantly once the Thai-Japanese FTA comes into the effect. The auto-industry representatives from both the US and the EU have in the past urged the Thai government to carefully study the implications of the FTA.”
The Associated Press noted that Thai prime minister Thaksin Shinawatra, discussing the FTA on Monday, had said that Thailand must ensure the agreement with Japan does not hurt its automotive industry.
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By GlobalData“We want to be the Detroit of Asia. We have to be confident that this (agreement) will not destroy our goal,” he reportedly said.
FTA opens Thailand to Japanese vehicles and steel
