Published on: Thursday, September 24, 2009 |
Kota Baru: There will be no tariff reduction on the export of rice, tobacco and alcohol from Malaysia when the Asean Free Trade Area (Afta) is fully implemented on Jan 1, 2010.
International Trade and Industry Minister Datuk 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 member countries.
"In the case of rice, we will not reduce the tax as Padi Beras Nasional Berhad is the sole exporter 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 on the Malaysian economy as it has resulted in quality manufactured products that meets international standards.
"The Ministry has been educating small and medium entrepreneurs, as well as large manufacturers, on Afta and its objectives through various on-going awareness programmes as it will benefit them in the future," he added. - Bernama
