Malaysia urges Thailand not to create new trade barriers TEAMCAR - Malaysia's quantitative restrictions on vehicle imports are allowed under world trade rules, Trade Minister Rafidah Aziz said Tuesday as she urged Thailand not to create new barriers to trade amid a dispute over auto tariffs.

Thailand has insisted that Malaysia's policy of giving permits for select few ethnic Malay-owned businesses to import foreign vehicles violates Asean's free trade pact rules and that it will not reciprocate Malaysia's decision to lower tariffs on Thai-made vehicles.

Thai Finance Minister Thanong Bidaya was reported to have said late Monday that the country would not drop its current 20 percent tariff rate until Kuala Lumpur gets "rid of all quantitative restrictions.''

But Rafidah contended Tuesday that the auto licensing policy is not an issue and that vehicles built in Malaysia should enjoy a cut in Thai import duties, partly in reciprocation to Malaysia's move in March to reduce import duties on vehicles made or assembled in ASEAN from 15 percent to 5 percent.

Asked if this signals rivalry between the two nations in becoming the region's automotive hub, Rafidah said: "No, the minister explains that the auto industry is complaining, that's all.''
It will not set back Asean as it is a bilateral issue, and officials will meet next month to resolve the issue, she added.

The Malaysian government has said it will scrap the auto import permit policy - which is meant to help Malays compete economically - by the end of 2010.  ¶ 3:15 PM