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Australia car makers reject five pct tariff date

MELBOURNE, July 29 (Reuters) - Australian car manufacturers have urged an inquiry into assistance for the industry against setting a deadline for dropping tariffs to five percent.

The Federal Government has frozen tariffs on auto imports at 15 percent until 2005, when they will drop to 10 percent, and is reviewing future arrangements for the industry.

The Productivity Commission held public hearings on the issue in Melbourne on Monday after releasing a preliminary report last month recommending that the tariffs should drop to five percent in 2010, pausing at that rate until 2015.

But General Motors Corp Australian unit Holden Ltd said in a written submission on Monday that it was too early to set target dates for moving to a negligible tariff.

Holden said there had been a lack of progress by Australia's trading partners on relatively free auto trade and any Australian move had to be within the bilateral and multilateral context.

"Ideally it is Holden's view that an end date be nominated for the tariff transition. However, we do not believe that Australia is yet in a position to nominate when this date may occur," it said.

"Holden firmly believes that Australia should not unilaterally disarm itself in world trade negotiations."

Toyota Australia said it accepted the tariff drop to 10 percent in 2005, but believed that the tariff should continue at that level beyond 2010.

"Any signals that the Australian Government will be unilaterally withdrawing support at a fixed future date will place the industry at a competitive disadvantage as we compete to attract the investment needed for further growth," Toyoto Australia president Ken Asano said.

The same theme was also put to the inquiry by the Australian unit of Ford Motor Co .

Australia's fourth car manufacturer is Adelaide-based Mitsubishi Motors Australia, a unit of Japan's Mitsubishi Motors Corp