Thailand has finally granted Malaysian AFTA CEPT preferential rates, dropping tariffs for items coming into Thailand from Malaysia from 20% to 5%. Full details of this approval would be announced later by the Finance Ministry of Thailand.
It previously refused to grant Malaysia the lowered rates because it said Malaysia was not AFTA-compliant because it has an Approved Permits system which Thailand said protects Malaysian automotive companies, creating an unfair environment. Malaysia managed to convince Thailand that the AP system is only to check details of imports and not to protect the local auto industry.
I suppose UMW Toyota can breathe a sigh of relieve now as it can now export it’s locally assembled Toyota Hiace vans to Thailand without being slapped with a 20% tariff which makes it’s prices uncompetitive. It is also good news for Isuzu who recently took up a controlling stake in MTB Sdn Bhd and has decided to make Malaysian one of it’s foreign manufacturing bases.