Ford seeks preferential duties for CBU imports

Ford Motor Co. Philippines Inc. is seeking preferential duties for its plan to import completely built up (CBU) units under the Asean Industrial Cooperation (AICO) agreement.

Ford has presented to President Arroyo its plan to implement the AICO agreement which would allow the car firm to avail of the preferential duties.

Based on the AICO scheme, Ford plans to produce the Ford Lynx, Laser and Mazda 323 models here in the Philippines which it would then export to Thailand.

In return, Ford would produce its Ford Ranger and Mazda Fighter pick-up models in Thailand which it would then import here.

Part of Ford’s plan also include the production of the Ford Escape sports utility vehicle and Tribute here which it would then export to Thailand in exchange for the latest Volvo Sedan.

Ford, however, is seeking preferential duties of between zero to five percent of the CBUs it will bring in.

Under the rules of the Motor Vehicle Development Program (MVDP), participants are slapped a 30 percent duty on CBUs.

The AICO scheme, which is a precursor to the implementation of the Asean Free Trade Agreement (AFTA), however is entitled to the preferential duties.

Thailand is reportedly not too happy about Ford’s plan as it could result in a trade deficit and would allow Ford to avoid Thailand’s existing duties on CBU’s.

The Philippines, on the other hand, may benefit more from the management as its motor vehicle export would increase.

Among the Asean members, the country’s motor vehicle export was a paltry 94 units last year as compared to Thailand’s 141,436 units; Indonesia’s 47,001 units and Malaysia’s 12,600 units.

Most of the other car firms that have availed of the AICO scheme, however, have limited it to vehicle parts production.