Australian review rebuffs automakers on tariffs

MELBOURNE, Aug 15 (Reuters) - An independent review of Australia's automotive industry rebuffed car manufacturers and unions on Friday and told the government to go ahead with plans to halve tariffs on imported cars from 2010.

Review chairman, former Victorian state leader Steve Bracks, said keeping the tariff cuts would help Australia as it negotiates a string of free trade deals and pushes to free up trade through the stalled World Trade Organization (WTO) talks.

"This will put us in a great position to argue for further free trade agreements which will advantage our export markets," Bracks told journalists on Friday.

But his findings have upset Australia's unions and car industry, which want the centre-left government to slow the tariff cuts in order to protect the sector and 60,000 local jobs, particularly after the latest collapse in WTO trade talks.

"Local car makers have always said there will be future reductions in tariffs," Chamber of Automotive industries chief executive Andrew McKellar told reporters.

"What we have to ensure is that it occurs in a way that will be matched by achievements in terms of improved export prospects in other markets."

Australia, a strong supporter of free trade, has long-standing plans to cut tariffs on imported cars from 10 percent to 5 percent in 2010.

Australia has free trade agreements with the United States, New Zealand, Singapore, Thailand and Chile, and is in talks with China, Japan, South Korea and the 10-member Association of Southeast Asian Nations (ASEAN).

The local car industry is struggling with falling domestic sales and a strong Australian dollar which is making imported cars cheaper. Higher fuel costs and tougher emission requirements are threatening production, traditionally aimed at large cars.

Mitsubishi Motors Corp. (7211.T) closed its plant in Adelaide, capital of South Australia state, earlier this year after closing its only other domestic plant a year earlier. That left only local subsidiaries of Ford Motor Co (F.N), Toyota Motor Corp (7203.T) and General Motors Corp (GM.N), who export large numbers of Australian-made vehicles and components.

Car makers build about 320,000 vehicles in Australia each year and employ about 60,000 people, accounting for about 6 percent of Australian manufacturing. Australia imports about 850,000 new vehicles a year.

Bracks recommended the government should double to A$1 billion ($870 million) its support for the industry to develop a locally-manufactured "green car".

Australia's centre-left Labor government set up the Bracks review shortly after it won power last November, after a series of car plant closures, and will now consider the report before announcing its plans for industry support. (Reporting by Miranda Maxwell; Editing by Louise Heavens)