In game theory, tit-for-tat is one of the most common strategies utilized with cold effectiveness. Recently within the realm of ASEAN, Thailand played such tactics on Malaysia due to the latter’s protectionist automotive policy. Accusing that thee Malaysian approved permit system acts as a non-tariff barrier, Thailand refused to grant ASEAN Free Trade Agreement tariff on Malaysian vehicles. Malaysia later relented, probably realizing that a better outcome could be reached if the two cooperated with each other to lower down trade barrier. Defection is a sad strategy, no matter how efficient it is.

Thanks to such sensibility, Thailand has agreed to lower down the barrier its imposed on Malaysian automotive goods:

The Thai Cabinet agreed on Tuesday to slash the country’s import tariff on Malaysian cars in line with the ASEAN Free Trade Area (AFTA), an assistant government spokesman said Tuesday.

The move came after Malaysia had abolished its own trade restrictions protecting its automotive sector, Mr. Chotechai Suwannaporn said.

The reciprocal moves are recognised both as gestures of goodwill within ASEAN, but also as tangible steps on the part of both countries to work towards an integrated regional trade area.

The former Thaksin administration delayed implementing tariff cuts for Malaysian cars, arguing that the neighbouring country had been implementing trade measures that were the main obstacle keeping Thai-built cars from penetrating its market. [Thailand to cut tariff on Malaysian Cars. Bangkok Post. June 27 2007]

Ah. A tit-for-tat with a happy ending. Hip hip hooray. More free trade please and let us tore down the wall of protectionism!

Trackback URI | Comments RSS

Leave a Reply