Indonesia backtracks on AFTA scheme<\/p>\n
By Riyadi<\/p>\n
KUALA LUMPUR (JP): Indonesia has again backtracked on a free
\ntrade process in the region by withdrawing five chemical products
\nfrom its earlier liberalization commitment.<\/p>\n
Nevertheless, Indonesia agreed at a meeting of trade
\nministers from the Association of Southeast Asian Nations (ASEAN)
\nhere yesterday that it would return the five products starting in
\n2000.<\/p>\n
Indonesian Minister of Industry and Trade Tunky Ariwibowo
\nconfirmed that Indonesia had taken the five chemical products off
\nthe inclusion list under the Common Effective Preferential Tariff
\n(CEPT) scheme, the main instrument designed to materialize the
\nASEAN Free Trade Area (AFTA) by 2003.<\/p>\n
"Yes, we managed to remove them ... and there shouldn't be any
\nproblem," Tunky said after attending the meeting of trade
\nministers.<\/p>\n
The five chemical products are ethylene, propylene,
\npolyethylene, polypropylene and sterine.<\/p>\n
Products on the inclusion list must have a maximum import
\ntariff of 20 percent, which then must be brought down to 5
\npercent or less by 2003 for six ASEAN members -- Brunei,
\nIndonesia, Malaysia, the Philippines, Singapore and Thailand --
\nby 2006 for Vietnam and by 2008 for Laos and Myanmar.<\/p>\n
Initially, all five chemical products were included on the
\nlist as their tariffs ranged from 5 percent for ethylene and
\npropylene to 20 percent for polyethylene and polypropylene.<\/p>\n
Then in early 1996, the government introduced a surcharge of
\n20 percent to four of the products, which was then made into a
\npermanent tariff in mid-1996.<\/p>\n
And earlier this year, an informed source said the government
\n-- through Ministry of Finance decree No. 151 -- announced a new
\nschedule of tariff reduction for those products, which was not
\nin-line with the CEPT scheme.<\/p>\n
"But we agreed at today's meeting to put back those five
\nproducts onto the inclusion list starting in 2000," the source
\nsaid.<\/p>\n
Sensitive list<\/p>\n
Last year, Indonesia managed to push back by 10 years a 2010
\ndeadline for integrating rice and sugar into the ASEAN free-trade
\nagenda by shifting those products from a sensitive list to a
\nnewly-created "highly sensitive" list.<\/p>\n
And in 1995, Indonesia transferred several unprocessed
\nagriculture products from the temporary exclusion list to the
\nsensitive list.<\/p>\n
Director General of Foreign Trade Djoko Moeljono argued that
\nIndonesia needed to protect its petrochemical industries because
\nthey were still in their infancy.<\/p>\n
"Unlike neighboring countries, our petrochemical industries
\nare not yet integrated from upstream to downstream, which makes
\nproduction costs higher. That's the reason why we need to protect
\nthem," Djoko said.<\/p>\n
Malaysia had been adamant about opposing Indonesia's move. It
\neven challenged to bring Indonesia to the World Trade
\nOrganization's dispute settlement body if Indonesia failed to
\nobserve its free-trade commitment.<\/p>\n
To prevent further backtracking on the AFTA process, Malaysia,
\nsupported by other members, proposed to adopt a "notification
\nprocedure" into the CEPT scheme.<\/p>\n
The notification procedure would require ASEAN countries to
\ninform each other 60 days in advance of any modification to their
\ncommitments under the AFTA agreement.<\/p>\n
Malaysian Minister of International Trade and Industry
\nRafidah Aziz said the CEPT agreement did not include any
\nnotification requirement.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesia-backtracks-on-afta-scheme-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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