Thailand to squeeze Vietnam on car checks

Thailand aims to put pressure on Vietnam for its non-tariff barriers on completely built-up (CBU) cars exported from Thailand.

The issue was serious enough that Thai exporters suspended their car shipments after Vietnam tightened inspections for all CBUs at seaports since early this year. CBU cars are required to be tested to meet environmental and emissions standards at a Vietnamese laboratory.

Import duties for Thai-made products were eliminated under the Asean Free Trade Area.

Auramon Supthaweethum, director-general of the Trade Negotiation Department, said that Thailand will move forward in negotiations with Vietnam at every meeting session and that laboratories must comply with mutual recognition arrangements (MRAs) for the inspections.

Vietnam has only one automotive testing agency, which takes roughly 30 days to complete its procedure and to clear customs.

Thailand, by contrast, has many agencies to test imported CBU cars under the Thailand Automotive Industry and Thai Industrial Standards Institute, all of which have complied with MRAs, which are largely accepted at a regional level.

“Once Vietnam agrees on the MRAs, the next step will be to test the cars ourselves before making shipments to Vietnam,” Mrs Auramon said after meeting with automotive-related agencies in the country. “We aim to cut the custom clearance procedure at Vietnam’s ports to facilitate Thai exporters and reduce duplicate inspections.”

She said Thailand will propose MRA procedures at the Joint Trade Committee (JTC) meeting scheduled for August.

Moreover, the department will submit Thailand’s concerns about slower and higher costs regarding the issue and will put pressure on Vietnam to cancel this inspection measure at every international trade meeting, including those for Asean and the World Trade Organization.

For other related issues, many Thai auto-parts makers are also concerned about the US government investigation into auto parts imported from Thailand under Section 232 of the 1962 Trade Expansion Act.

Mrs Auramon said the department and manufacturers are teaming up to prepare for when the US government imposes 25% import tariffs.

But the US Commerce Department investigation will take roughly nine months to conclude, after which the department will submit a report to President Donald Trump. He will have 90 days to make a decision on the tariffs.

“We will prepare actual data to explain to the US government that auto parts from Thailand are limited in volume and do not affect the US auto industry and domestic security,” Mrs Auramon said, noting that Thai auto parts exports to US ranked 18th, representing 1% of the US’s total parts imports of US$290 billion (9.29 trillion baht).