The protocol allows members to temporarily delay tariff cut commitments on sectors deemed unprepared for liberalisation. Last year, demand for automobiles in Malaysia was estimated at 360,000 units. That means had Malaysia complied with the agreement, Thailand would have shipped 36,000 automobiles to Malaysia last year, said Sommai. Sommai said the estimates were concrete owing to the fact that Thai- exported automobiles are usually 15 percent cheaper than those imported from other countries. Automobile industry analysts said the delay in freeing the auto sector may affect foreign auto investments from companies interested to establish joint-ventures in Thailand and those already present here.
Most big automakers have some investment in Southeast Asia, with Thailand their first choice.
Nonetheless, the region's tariff barriers and fragmented markets have reduced average plant capacity, making it twice as expensive to produce in the Asean region compared to the US Toyota Motor, GM and other big automakers have warned that the delay in creating a common market for cars will accelerate the diversion of billions of dollars of investment to China and India. Thailand and Vietnam, who, as the world's two largest rice exporters, evenly share the rice export market, agreed not to compete for sales volume by dumping rice on the global market, Somkid said. The two sides will work closely together to cope with the slump in global rice prices, he said. The two sides also agreed not to make maximum profit on rice exports, but to make prices fair to rice growers. Somkid said Malaysia and Thailand, two of the world's leading rubber exporters have agreed to work together to solve falling rubber prices, adding that Malaysia also agreed to invest in a rubber processing plant in Thailand which lacks a modern rubber processing factory.