Free trade Malaysian style

The Japan­ese press is report­ing a hic­cup in the pro­posed Japan-Malaysia ‘free trade agree­ment’. bq. Malaysia cut trade tar­iffs on car parts in Jan­u­ary based on Asso­ci­a­tion of South­east Asian Nations (ASEAN) rules. But it hiked the com­mod­i­ty tax on import­ed cars and local­ly made for­eign vehi­cles, leav­ing domes­tic man­u­fac­tur­ers in a high­ly advan­ta­geous posi­tion. (“Manichi Dai­ly News”:http://mdn.mainichi.co.jp/news/20040718p2a00m0fp012000c.html) It’s been clear for some time that Malaysia’s ASEAN trad­ing part­ners are less than amused by these shenan­ni­gans. The Japan­ese stand on this issue, how­ev­er, was not always quite as straight­for­ward as it seems. For many years Malaysia’s nation­al auto man­u­fac­tur­er (Pro­ton) was engaged in a part­ner­ship with the the strug­gling Japan­ese man­u­fac­tur­er, Mit­subishi, who pre­sum­ably prof­it­ed from the pro­tec­tion. The new own­ers of Mit­subishi (Daim­ler-Chrysler) “got out”:http://www.aiada.org/article.asp?id=4700 of the part­ner­ship with Pro­ton ear­li­er this year. The mar­ket for import­ed vehi­cles in Malaysia is dom­i­nat­ed by Japan­ese and Kore­an man­u­fac­tur­ers who have “reportedly”:http://www.sandsmuseum.com/cars/elise/information/press/press/press2004/protonsell.html won a half share of demand despite the high pro­tec­tion for the local prod­uct. For­mer PM, Mahatir Mohammed is now a con­sul­tant to the Malaysian Pro­ton car com­pa­ny; he is said to be demand­ing anoth­er 20 years of ‘infant indus­try’ pro­tec­tion for the nation­al car mak­er.

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