Ford Thailand objects to planned Thai-Japan FTA
Dow Jones Newswire
August 2, 2005
Ford Thailand Objects To Planned Thai-Japan FTA -Report
BANGKOK (Dow Jones)—The state-run Thai News Agency said Tuesday that the impact of a tentative free-trade agreement with Japan on the automobile industry’s import tariff structure may prompt the U.S.-based giant Ford Motor Co. (F) to reconsider planned investments in Thailand.
But the agency cited Prime Minister Thaksin Shinawatra as saying that he wanted to make sure that the development of the industry wouldn’t be disrupted by the agreement.
The new playing field created once the Thai-Japanese FTA takes effect - possibly in September 2006 - would put Ford at a serious disadvantage, and investing in Thailand wouldn’t be worth it in the long term, the TNA cited Ford Operations (Thailand) Ltd. President John Felice as saying.
Ford Operations officials weren’t immediately available for comment.
Felice’s comments came after the Thai negotiating team said Monday they had agreed with the Japanese team on a reduction formula for import tariffs on completely-built-up cars with engines of 3,000 cubic centimeters or more.
TNA reported that although Felice noted he hadn’t yet seen the details of the agreement, he said that if the reports were true Ford would have to reconsider its investment strategy.
"The tax policy of Thailand at the moment bodes well for investment in Thailand, as Ford realizes the potential of the country. This environment would be altered significantly once the Thai-Japanese FTA comes into the effect. Auto-industry representatives from both the U.S. and the E.U. have in the past urged the Thai government to carefully study the implications of the FTA," Felice was quoted as saying.
Ford has invested $1 billion in Thailand, the TNA report said.
The agency cited Prime Minister Thaksin Shinawatra as saying that Thailand must ensure the agreement with Japan doesn’t hurt its automotive industry.
"We want to be the Detroit of Asia. We have to be confident that this (agreement) will not destroy our goal," he was quoted as saying.
While Thailand doesn’t have its own car companies, it is a major parts production and assembly base for the world’s big auto companies, including Toyota Motor Corp. (TM), Honda Motor Co. (HMC) and General Motors Corp. (GM).
