Japan, Thailand, Malaysia and the Philippines to Eliminate Tariff

Industry associations from Japan, Thailand, Malaysia and the Philippines have agreed to support the elimination of tariffs on trade in textile products among the four countries. The four nations are expected to start government-level talks this summer on free trade agreements, and textiles will be high on the agenda.  

If the tariffs are eliminated, Japan will see an increase in imports of cheap textile products from the three other nations. Observers said the agreement would create a precedent for future FTA talks with other nations and the nation might negotiate with China, the largest exporter of textiles to Japan, to abolish tariffs on textile goods.

If the three nations call for a delay in abolishing tariffs on some textile products, Japan would request equivalent measures, according to the agreement. Governments of the three nations appear to be giving serious consideration to the basic agreement.

By removing the tariffs, the three nations are expected to increase their exports to Japan of such low-priced products as underwear, silk and polo shirts in competition with price-competitive Chinese products. Japan can expect an expansion of its exports of high quality fabrics and women's clothes to the three countries.

But Japan is concerned that small and midsize domestic textile makers, which total about 40,000 to 50,000, would face severe competition due to increases in imports. The firms produce towels, shirts and other textile goods. The government is considering extending assistance for those firms to help them shift their production to high-quality goods and enhance their brand images and production technologies.

Textile products imported from the three nations to Japan stood at 73.2 billion yen in 2002. Tariffs on those products range from 2 percent to 12.5 percent. Textile goods exported from Japan to the three nations stood at 55.7 billion yen the same year, and tariff rates ranged from 5 percent to 30 percent.

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