Mr Kelvin Thomson asked the Minister for Trade, upon notice, on 4 February 1997:

(1) Is he able to say what tariffs (a) are applied and (b) have been applied in each year since 1991, to Australian made vehicles and components by (i) Thailand, (ii) Indonesia, (iii) Malaysia, (iv) Japan, (v) Korea, (vi) China and (vii) Vietnam.

(2) Is he also able to say whether specific (a) guarantees have been offered by any of the states referred to in part (1) which will deliver lower tariff rates and import barriers to Australian made vehicles and components and (b) undertakings have been entered into by governments of any of those states, or vehicle manufacturers in any of those states, to improve fuel efficiency, environmental or emission benchmarks, in the next decade.

(3) What productivity gains have been experienced in the Australian automotive industry since 1986.

Mr Tim Fischer —The answer to the honourable member's question is as follows:

(1)

(i) Thailand

(a) currently applies the following tariff rates on automotive products:

.   Completely knocked down (CKD) passenger motor vehicles (PMV): 20 per cent

.   Completely built up (CBU) PMV with engines smaller than 2,400 cc: 42 per cent

.   CBU PMV with engines larger than 2,400 cc: 68.5 per cent

.   components: maximum rate of 40 per cent or 20 per cent as part of a knocked down kit.

(b) these rates have been unchanged since July 1991 except for the maximum tariff on components which was lowered from 60 to 40 per cent on 1 January 1997.

(ii) Indonesia

(a) currently applies a tariff of 125 per cent on PMV and a 75 per cent surcharge on imported PMV. Tariffs on components vary from zero to 65 per cent depending on the percentage of local content in the vehicles they are to be used in.

(b) prior to 1993 imports of PMV were banned. In June 1993 this ban was lifted and a tariff rate of 200 per cent on both CKD and CBU PMV was introduced. An additional 100 per cent import surcharge applied to CBU PMV. The basic tariff was reduced to 175 per cent in 1994 and the current rates were introduced in May 1995. Prior to May 1995 the maximum tariff rate on components was 100 per cent.

(iii) Malaysia

(a) currently applies the following tariffs on automotive products:

.   CKD PMV: 42 per cent

.   PMV with engines smaller than 1,800cc: 140 per cent

.   PMV with engines between 1,800 and 2,500cc: 170 per cent

.   PMV with engines between 2,500 and 3,000cc: 200 per cent

.   components: 0 to 30 per cent

(b) the current tariff regime has applied from October 1994. Prior to this applied tariff rates were based on the value (CIF) of the imported vehicles, i.e:

.   not exceeding RM20,000: 140 per cent

.   RM20,001—RM25,000: 160 per cent

.   RM25,001—RM30,000: 185 per cent

.   RM30,001—RM35,000: 210 per cent

.   RM35,001—RM40,000: 250 per cent

.   exceeding RM40,000: 300 per cent

CKD PMV attracted a 40 per cent tariff until September 1991 when it was increased to the current 42 per cent. The tariffs on components have been in the range 0-30 per cent since 1991.

(iv) Japan

(a) does not apply any tariffs on imported PMV or components, in other words zero per cent.

(b) did not apply tariffs on imported PMV or components in the period since 1991, in other words zero per cent.

(v) Korea

(a) currently applies a tariff of 8 per cent on PMV and 8 per cent on components.

(b) tariff levels (expressed in percentages) since 1991 are as follows:

(vi) China

(a) currently applies a tariff of 100 per cent on PMV. Tariffs on components vary between 6-50 per cent.

(b) information on the tariff rates applying from 1991, prior to the current rates, is unavailable.

(vii) Vietnam

(a) currently applies a tariff of 55 per cent on CBU PMV and from 7-40 per cent on knocked down PMV. Tariffs on components for PMV vary from 40-50 per cent.

(b) the current tariff rate on CBU PMV of 55 per cent was introduced in January 1996 and was reduced from 200 per cent. The relevant authorities have not been able to provide any additional information on tariff rates or changes in those tariffs applying up to 1996.

(2)

(a) All of the states referred to in part (1), with the exception of Vietnam, are members of the Asia Pacific Economic Cooperation (APEC) forum and have made a commitment through the 1994 Bogor Declaration to achieve "free and open trade and investment in the Asia Pacific region, no later than 2010 in the case of industrialised economies and 2020 in the case of developing economies"

Future reductions in tariff and other trade barriers have been announced:

.   Thailand will eliminate its local content policy from 1998.

.   Indonesia has set a schedule to reduce tariffs and surcharges up to 2003. In 2003, CBU PMV will face a maximum import duty of 40% and a surcharge of 50%. The maximum import duty on CKD PMV and components will be reduced to 25%.

.   Korea will liberalise requirements for local performance testing of small volume exports. On 1 January 1998 threshold level of imports for this testing will increase from 500 to 1,000. This continues from other recent liberalisation measures.(b) To implement the Bogor Declaration commitment to free and open trade and investment, APEC leaders made a commitment to align mandatory and voluntary standards with international standards. The APEC Transportation Working Group has developed a Collective Action Plan which includes the following activity:

"Encourage involvement in dialogue with the United Nations Economic Commission for Europe and strive towards harmonisation of road vehicle regulations within an appropriate international forum"

These commitments provide an impetus for all APEC economies to reach agreement on all road vehicle regulations including those related to fuel efficiency, environmental and emission benchmarks.

All vehicles marketed in Australia, whether manufactured locally or overseas, are required to comply with the relevant Australian Design Rules for motor vehicles and trailers.

(3) The Minister for Industry, Science and Tourism has provided me with the following information in answer to this part of the question:

"Two recent publications by the Productivity Commission have reported measures of labour productivity for both car assemblers and component manufacturers in Australia. These are the Productivity Commission's Automotive Case Study Micro Reform—A Survey of Impacts on Firms (1996) , and its recent Draft Report Entitled The Automotive Industry (1996).

Both publications report that when labour productivity of car assemblers is measured using vehicles per employee, the industry produced, on average, ten vehicles per employee in 1986 compared with sixteen vehicles per employee in 1995. These figures appear to indicate that there has been a sixty per cent increase in labour productivity of car assemblers over this period.

The Commission reported on an alternative measure of labour productivity of Australian car assembly plants, based on the methodology employed by the International Motor Vehicle Program (IMVP). The IMVP measure is designed to benchmark international labour productivity. It estimates that on average, Australian car manufacturers took 40.9 labour hours to produce a standardised vehicle in 1988 compared with 35.5. hours in 1993. This represented a thirteen per cent improvement over this period.

The Productivity Commission's Draft Report provided an estimate of IMVP labour productivity for 1996 of 26 hours per standardised vehicle, but it must be stressed that this an estimate based on the best information available to the Commission, and was not a figure produced by the IMVP itself. If this figure were accurate, it would indicate a thirty six per cent increase in labour productivity of Australian car producers since 1988.

Both Productivity Commission publications also provided estimates of the productivity of component producers using sales per employee as the basis for its calculations for the period 1990-91 to 1995. The Commission's figures show that the labour productivity of the top thirty five component producers has increased by around forty four per cent since 1990-91."