Tuesday November 3, 2009
Much to lose from import ban
THERE is a proposal to ban the import of used auto parts by June 2011. I honestly think this proposal should be reconsidered.
Although I suspect the reason behind it is to protect the local industry, the loss that will result from the ban is quite enormous in pecuniary and non-pecuniary terms. The reasons include:
> Trade in used auto parts is an established international business with players from all over the world;
> The used items comprise small parts like starters, alternators, power steering pumps, steering racks as well as engines and half-cuts; and
> There is currently a rebuild industry for buses and trucks with approval from Miti, customs, Transport Ministry, etc. Some of the companies concerned may also be listed on Bursa Malaysia.
Some of the (used) parts are brought in either from Japan or Europe and assembled here (rebuild).
The players involved are importers (mainly Malaysians), exporters (Japan, Australia, New Zealand, Britain and other European countries), workshops (local and international), customs, forwarders, freight forwarders, bankers and end-users.
Even in Malaysia alone, there are many buyers from Saudi Arabia, the United Arab Emirates, South Africa, North Africa, West Africa, Pakistan, Afghanistan, Bangladesh, China, the United States and the European Union.
Some of them buy direct from Japan, but many prefer buying from Malaysia because of convenience in terms of language, lodgings, etc.
In some countries this industry is regulated and monitored properly. It is also known as the “recycling industry,” where a certain ISO standard is given to ensure it is clean, safe and does not pollute.
Even Thailand (since Miti likes to use this country as a comparison) has established this business with a vast global network.
In Bangkok alone there are at least four huge areas specifically serving this kind of business.
The Government should seriously reconsider the proposal and take into account all the factors above.
Just imagine the huge losses that would result in government revenue if used auto parts were banned.
SHUKRI,
Sungai Buloh.
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