06 September 1997 00:00 [Source: ACN]
A THAI major has been told by a source close to the government that polymer import tariffs will not be cut in July.
The news will come as a surprise to other leading companies who had understood that tariffs would be cut as part of the commitment to meet the Asean deadline of reducing all member countries' tariffs to 5% by 2003.
But a Thai Plastic and Chemicals (TPC) spokesman told ACN: 'We understand from a source close to the government that the polymer tariff will stay at 27%. We were concerned that tariffs would be reduced to 20%. Our projections for Q3 and Q4 were based on 20%.'
An industry source added: 'It looks like tariffs may well stay the same. 'The problem the Thai government faces is meeting the timetable set under the Asean Free Trade Area of reducing all tariffs to around 5% while not finding itself out-of-step with other member countries. There is a feeling that tariffs shouldn't be reduced any further at present because countries such as Indonesia have higher tariffs than Thailand.'
The government is also aware that the ailing polymer industry has recently had to contend with fluctuations in the value of the baht (ACN 26 May, p7).
In February this year, polymer tariffs were cut from 30% to 27% with the further 7% reduction expected to be announced on 1 July.
'The danger is that if tariff cuts continue to be delayed, the industry may have to face huge reductions at some point if Thailand is to keep within the Asean deadline,' added the industry source. This could be why a source within another Thai major, HMC Polymers, told ACN that import tariffs would be cut.
A spokesman for Thai Petrochemical Industry said: 'We don't know whether tariffs will be reduced or retained. We favour a retention to help the industry.'
Import tariffs for upstream chemicals were as much as halved by the government in February. A decision to further reduce or retain these imports will be announced on 1 July.
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