According to the New Straits Times, Malaysia will dissolve the cap on imported US vehicles once the Trans-Pacific Partnership (TPP) agreement swings into motion. The move was disclosed in a side letter between the two nations on the automotive sector as part of the recently-released 600-page TPP document.
Also, Malaysia will “not impose new or additional charges on the imports of vehicles from the US,” the English-language newspaper reports, in reference to the side letter issued by the Malaysian Ministry of International Trade and Industry (MITI) to the US Trade Representative (USTR).
Beginning January 1 2021, Malaysia will “not provide excise tax credits on motor vehicles based on export performance and use of local content or local value added.” In addition, Malaysia has also agreed to be transparent in disclosing the details regarding any new excise duty structure that is introduced.
“Malaysia shall publish, and provide opportunities for any person or party to review any draft of any proposed regulation, standard or conformity assessment procedure related to excise duties for motor vehicles as soon as it is available,” it was noted in the aforementioned letter.
Separately, International Trade and Industry minister, Datuk Mustapa Mohamed, had earlier mentioned that car prices have dropped by 17.9% since 2013, in line with his party’s manifesto issued during the 13th General Election. “In 12 years’ time, the import duties of US vehicles, currently at 30%, will be gradually reduced to zero percent,” he commented on the Trans-Pacific Partnership (TPP) agreement.
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AI-generated Summary ✨
Comments express skepticism about the impact of removing US vehicle import caps, citing high taxes, import duties, and other smaller barriers that limit real price reductions. Many doubt that American cars like Ford Mustangs or Chevrolets will become significantly cheaper, given existing taxes and the fact that most US models are not imported directly. Some hope for benefits from brands like Tesla or Acura, but overall, there's a sentiment that the policy change won't lead to substantial, immediate price drops.