NO TAX CUT FOR RICE, TOBACCO AND ALCOHOL UNDER AFTA 2010

KOTA BAHARU (Malaysia), Sept 23 (Bernama) -- There will be no tariff
reduction on the export of rice, tobacco and alcohol from the ten-member Asean
region when the Asean Free Trade Agreement is fully implemented on Jan 1, 2010.

Internationl Trade and Industry Minister Mustapa Mohamed said these
items were included in AFTA's sensitive list and were exempted from the tariff
reduction obligation as agreed to earlier by Asean members countries.

" In the case of rice, we will not reduce the tax as PadiBeras Nasional
Berhad (Bernas) is the sole importer of this staple food item.

" There will also be no tax cut on other sensitive items such as alcohol and
tobacco as this has been discussed with member countries of the grouping," he
told reporters after hosting a Hari Raya gathering here Wednesday.

AFTA was established in 1992 with the objective of increasing Asean's
competitive advantage as a production base geared for the world market.

A vital step in this direction is the liberalisation of trade through the
elimination of tariffs and non-tariff barriers among Asean members.

AFTA's ultimate target is to totally eliminate import duties on all products
with the intention of creating an integrated market where there will be a free
flow of goods within the region.

The AFTA Council agreed that the target dates to achieve this objective will
be 2010 for the six original Asean member countries and 2015 for the newer
members namely Cambodia, Laos, Myanmar and Vietnam.

Mustapa said with AFTA, investors would be attracted to set up operations in
the Asean region and consumers would be able to benefit from efficient producers
and boost intra-Asean trade.

" With price competitiveness in the manufacturing sector and the huge market
for products, investors will be able to enjoy economies of scale when they
embark on large scale production," Mustapa added.

He said AFTA has had a positive impact as it has resulted in quality
manufactured products that met international standards.

" My ministry has been guiding small-and-medium scale entreprenuers, as well
as big-time manufacturers, on AFTA and its objectives, through various
programmes as it will benefit them in the future," he added.

--BERNAMA