Japan seeks review of Thailand’s car tariffs under JTEPA
JTEPA will undergo its next 10-year review in 2027, with Japan seeking talks on Thai import tariffs of up to 80% for passenger cars
- Japan has formally requested that Thailand review its import tariffs on Japanese vehicles under the Japan-Thailand Economic Partnership Agreement (JTEPA).
- The tariff review is set to be a central issue during the comprehensive JTEPA negotiations scheduled for 2027.
- The request highlights a significant tariff imbalance, as Japan imposes a 0% tariff on vehicles from Thailand, while Thailand's duties on certain Japanese passenger cars are as high as 80%.
Thailand and Japan are due to conduct a full review of their bilateral economic partnership agreement in 2027, with automotive import tariffs expected to be a central issue after Japan asked Thailand to reconsider its duties on Japanese vehicles.
The Japan-Thailand Economic Partnership Agreement (JTEPA) has been in force since 2007. It seeks to reduce or eliminate tariffs, encourage investment and expand economic cooperation between the two countries.
JTEPA requires the agreement to be reviewed every 10 years. Thailand and Japan have already held three meetings of the subcommittee responsible for its general review.
The agreement is due for its next comprehensive review in 2027.
Thailand has proposed on several occasions that discussions begin before the deadline, allowing both countries to identify issues that could produce mutual benefits.
Passenger-car tariffs enter the negotiations
Japan currently imposes no import tariff on any category of vehicle shipped from Thailand under JTEPA.
Thailand applies rates of either 0% or 20% to tractors, passenger-transport vehicles, goods vehicles and motorcycles, depending on the category.
Its tariff structure for passenger cars includes:
- 0% for golf carts and ambulances.
- 20% for electric vehicles and certain other vehicles.
- 60% for cars with engines larger than 3,000cc.
The most-favoured-nation rate of 80% for cars with engines below 3,000cc where Thailand has not made a binding tariff commitment under JTEPA.
Japan has asked Thailand to review the tariffs applying to automotive products. No revised rate has been agreed, and the issue will be subject to negotiation.
ASEAN-Japan agreement may also be upgraded
Thailand also has a free-trade relationship with Japan through the ASEAN-Japan Comprehensive Economic Partnership (AJCEP).
The possibility of reviewing that agreement was discussed at the 22nd meeting of the AJCEP Joint Committee.
All participating countries supported an early upgrade of the agreement. Japan is coordinating with the ASEAN Secretariat to schedule detailed discussions.
South Korea seeks greater automotive access
Thailand is separately negotiating a bilateral free-trade agreement with South Korea. The talks began in 2024 and have completed seven rounds, with both sides still working towards a conclusion.
South Korea has shown particular interest in automotive products, especially electric vehicles.
Thailand is consulting government agencies, automotive associations and parts-industry representatives before determining its position. The consultations cover the possible effects on businesses, consumers, domestic investment and Thailand’s wider trade interests.
Thailand and South Korea already trade under the ASEAN-Korea Free Trade Area (AKFTA), which has been in force for Thailand since 2010.
ASEAN and South Korea are also negotiating an upgrade of AKFTA to modernise the agreement and address current trade issues. The negotiations are not focused principally on opening additional goods markets.
Members aim to achieve a substantial conclusion to the AKFTA upgrade negotiations by 2027.
