Indonesia unlikely to seek exemption from AFTA<\/p>\n
JAKARTA (JP): Indonesia will unlikely ask for an exemption
\nfrom the ASEAN Free Trade Area (AFTA) for its car industry,
\nDirector General for Metal, Machinery, Electronics and Various
\nIndustries, Agus Tjahajana, said here on Wednesday.<\/p>\n
Agus said the government had so far seen no strong reasons to
\ndelay the commitment to AFTA, which was scheduled for full
\nimplementation by 2003 for the automotive sector.<\/p>\n
\"Why do we need to ask for an exemption? We've seen no
\njustification to do so,\" he said on the sidelines of a meeting
\nwith House Commission V in charge of trade and industry.<\/p>\n
He said the opening of local car markets would mostly affect
\nthe foreign car makers, which now assemble and sale their
\nproducts in Indonesia as well as in other ASEAN countries, but
\nnot Indonesia's own national car production.<\/p>\n
\"Unlike Malaysia, which has a strong national car project,
\nProton, we have no national car products to be protected so we
\ndon't need to ask for exemption,\" he said.<\/p>\n
Indonesia's national car project was suspended in January 1998
\nafter a strong protest from the World Trade Organization because
\nof the discriminative tax facility given for the project.<\/p>\n
Agus said that since Indonesia's car industry is still
\ndominated by foreign brands, it will be the foreign car
\nassemblers who will face tougher competition from other foreign
\ncar assemblers operating in other ASEAN countries.<\/p>\n
\"So the competition will only emerge between and among
\nthemselves and I'm sure they will be able to manage it,\" he
\nadded.<\/p>\n
Local automotive manufacturers, mostly operating in
\npartnership with Japanese and European car makers, have recently
\ncalled on the government to ask for exemption from AFTA by two or
\nthree years in order for the local car industry to fully recover
\nbefore opening up the market.<\/p>\n
They said Indonesia had two good reasons to ask other ASEAN
\nmembers to delay AFTA's schedule on the car industry because its
\ncar industry has not recovered from the crisis and because the
\nASEAN members have not achieved a harmonized settlement for the
\ncar component sector in the planned liberalization of the auto
\nindustry under AFTA.<\/p>\n
Agus said his office had not received any complaint about
\nIndonesia's commitment for AFTA from local car producers or
\nexperts.<\/p>\n
AFTA is a pact among the 10 member countries of the
\nAssociation of South East Asian Nations (ASEAN), comprising
\nBrunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
\nPhilippines, Singapore, Thailand and Vietnam.<\/p>\n
Under AFTA, ASEAN countries will see a free flow of automotive
\nproducts since the import tax on automotive products will be cut
\nto a maximum 20 percent by the year 2000, and will be cut further
\nto between zero and five percent by 2003.<\/p>\n
However, local or regional content for ASEAN members must be
\nat least 40 percent of their finished automotive products to be
\nsold within the region.<\/p>\n
Malaysia has made a special request that it be allowed to
\nmaintain protective tariffs on automobile imports until 2005,
\nsaying it needed to further strengthen its Proton national car
\nprogram before joining AFTA.<\/p>\n
ASEAN economic ministers meeting in Yangon earlier in May
\nagreed to consider Malaysia's request and will decide on the
\nmatter in October. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesia-unlikely-to-seek-exemption-from-afta-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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