TOKYO, July 19 (UPI) -- Malaysian cars and Japanese agricultural products are the sticking points as the two countries work toward a free trade agreement in Tokyo this week.
Japan will ask Malaysia to abandon protection of its domestic car industry, while Malaysia is expected to counter with demands for a larger share of Japan's agricultural market, the Mainichi Shimbun reported Sunday.
Malaysia exempts domestic car manufacturers from 50-100 percent of commodity taxes, and from 70 percent of import tariffs on auto parts. Consequently, local cars account for 85 percent of the domestic market.
Though Malaysia cut trade tariffs on car parts in January in accordance with Association of Southeast Asian Nations rules, it hiked the commodity tax on imported cars and locally made foreign vehicles.
As if to strengthen Malaysia's stand, former Prime Minister Mahathir Mohamad, now an advisor to a major domestic car manufacturer, reportedly asked the government to maintain protections on domestic cars for 20 years.
