Malaysia may introduce measures such as new duties to protect local carmakers when the sector is liberalised in 2005 under a regional free trade plan, a report said on Wednesday.
Trade Minister Rafidah Aziz was quoted by the Business Times as saying that the government would not impose non-tariff barriers for imported vehicles but may seek other measures allowed under the ASEAN Free Trade Area (AFTA).
"The government can introduce other measures such as certificate of eligibility or other duties," she said.
Under AFTA, most members must cut tariffs on imports for agreed products to a maximum of five percent by next year. Malaysia has obtained a two-year reprieve for its auto industry until 2005.
Non-tariff barriers on trade include standards, conformity assessment and technical regulations, the newspaper said.
Rafidah said other measures not amounting to non-tariff barriers included higher sales tax, and surcharges or certificates of eligibility which had been adopted in other countries.
She said Malaysia has not decided on what measures to take when the auto sector opens up in 2005 but would study all the options available.
The government would also find new ways to equalise treatment for local and imported products without losing revenue from the lowering of tariffs, she added.
On Monday, Prime Minister Mahathir Mohamad said national carmaker Proton may not be able to compete if a 40 per cent local content rule for companies to take advantage of tariff cuts under AFTA was not reviewed.
The premier, however, said Malaysia would not introduce non-tariff barriers for its auto sector in 2005 as the industry should become "more efficient and cost-effective" by then.