MALAYSIA ON TRACK TO REALISE AFTA BY 2010

By D. Arul Rajoo

HUA HIN (Thailand), Oct 26 (Bernama) -- Malaysia is well on track to realise
the Asean Free Trade Area (Afta) on Jan 1, 2010 as only 89 products are left
without tariff elimination.

International Trade and Industry Minister Mustapa Mohamed said the
average import duties currently stood at 1.04 per cent compared to about 20 per
cent in 1992 when Afta was established.

"We have yet to achieve 100 per cent but that is normal as every country has
its own list of sensitive items," he said.

Mustapa said Malaysia was committed to eliminating import duties on 2,123
products, reducing import duties to five per cent for sensitive items like
tropical fruits, tobacco and tobacco products, and reducing import duties for
rice and rice products to 20 per cent.

"Afta not only brings benefits to the business sector, but also the people
on the ground. Ordinary people can now purchase products from Asean countries at
a much lower cost than before," he told Malaysian media on the sidelines of the
15th Asean Summit here.


Mustapa said the business community should take advantage of the Afta and
tap the huge potential in the 10-member countries with 580 million people,
adding that they should not be worried about dumping of cheap import goods at
home as there would be special safeguard mechanism to protect local goods.

Asked if there was a danger of Afta being postponed due to conflict between
Thailand and the Philippines over the rice tariff, Mustapa said it would proceed
as scheduled, with both countries continued with their negotiations.

Thailand, the world's largest rice exporter, had threatened that it would
not sign the Afta liberalisation for the rice trade next year if the Philippines
does not import at least 360,000 tonnes of rice, tariff-free, annually from
Thailand.

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 six Asean members comprising Brunei, Indonesia, Malaysia, the
Philippines, Singapore and Thailand, and 2015 for the newer members namely
Cambodia, Laos, Myanmar and Vietnam.

All products have to comply with Rules of Origin (ROO) to enjoy zero per
cent duties.

The ROO requires the goods to have 40 per cent local Asean content under
Common Effective Preferential Tariff (Cept) as well as comply with standards and
sanitary and phytosanitary regulations.

-- BERNAMA