Thai Tax Rebate Plan Draws Official Protests

Three countries file protests against the Thai government's tax rebate for first-car buyers, claiming it is an unfair and illegal trade practice because it excludes imported vehicles.

Diplomats from the Malaysian, Indian and South Korean embassies sent protest notes to the Trade Negotiations Department of the Commerce Ministry, saying the scheme violates the General Agreement on Tariffs and Trade of the World Trade Organization.

Rebate-program spat delays Nano exports to Thailand.

The Bangkok Post reports embassy officials met after the Thai government refused to include imports in the plan, in the process rejecting appeals from Proton, Tata and Hyundai.

WTO rules bar member nations from treating import goods less favorably than domestically produced products through laws, regulations or requirements that would affect their sale, purchase, bidding, transportation, distribution or use.

Malaysia's Proton Saga and Savvy models both have engines below 1.5L and would qualify for the program if they were domestic models.

Indian auto maker Tata says the scheme is a breach of free-trade practices.

It has delayed plans for the launch of its Nano small car in Thailand until the rebate program ends.

An unnamed executive at Tata Thailand tells the newspaper the decision mainly is a protest against the program.

The government-operated National News Bureau says the Commerce Ministry and the Thai Automotive Industry Assn. believe the rebate program will help the auto industry recover from the current flood disaster.

Speaking during the program’s inauguration ceremony, Commerce Minister Kittirat Na Ranong says the scheme is meant to help people with moderate incomes buy their first cars.

The News Bureau says turnout at the ceremony was disappointing, with only 59 people registering to buy a car.

The industry association believes the program will increase vehicle sales by 500,000 units by the end of 2012.

It says demand for new cars will rise after the floods recede because the water likely will have damaged many cars.