Japan warns RI over Timor car<\/p>\n
CHRISTCHURCH, New Zealand (AFP): Japan warned yesterday that
\nit may go to the World Trade Organization (WTO) over help given
\nby the Indonesian government to a car company part-owned by
\nPresident Soeharto's youngest son.<\/p>\n
The company, PT Timor Putra Nasional, will be allowed to
\nimport components without paying steep duties and luxury goods
\ntaxes if it can meet a local content requirement of 60 percent by
\nthe third year of production.<\/p>\n
Some Indonesian newspapers have been reporting for three
\nmonths that Timor Putra will be the sole beneficiary of tariff
\nbenefits offered under the program.<\/p>\n
The preferential treatment has been criticized by Japan, whose
\ncar-makers account for more than 90 percent of vehicle sales in
\nthe 180 million-strong Indonesian market.<\/p>\n
But Jakarta has steadfastly refused to change its policy
\ndespite complaints that it may violate international trade rules.<\/p>\n
The arrangement has been the subject of talks here between
\nJapanese and Indonesian officials attending the two-day Asia
\nPacific Economic Cooperation group conference that finished here
\nyesterday.<\/p>\n
Atushi Ohi, director of the automobile division of Japan's
\nMinistry of International Trade and Industry, told reporters
\nnegotiations were continuing, but Japan could have no choice but
\nto go to the WTO.<\/p>\n
"Japan got a shock when suddenly Indonesia came up with this
\nscheme," he said through an interpreter. "The policy of the
\nIndonesian car industry is of great concern.<\/p>\n
"Japan has invested a lot of money in the Indonesian
\nautomobile industry. In 1985 when the Europeans and U.S.
\ninvestors pulled out of Indonesia Japan stayed and continued to
\ninvest.<\/p>\n
"But we want the issue to be out in the open."<\/p>\n
General opinion in Japan was that "we should go to the WTO,"
\nhe said.<\/p>\n
He said the Japanese government was reluctant to do so because
\nthe national car had been on exhibition, orders had been taken
\nand first deliveries were due at the end of the month.<\/p>\n
"We hope discussions will continue with Indonesia, but we may
\nhave no choice but to go to the WTO."<\/p>\n
Indonesia's Industry and Trade Minister Tunky Ariwibowo, who
\nis here for talks, refused to comment but the minister for
\ninvestment, Sanyoto Sastrowardoyo, said in a recent interview
\nthat Indonesia would defend its policy on the grounds of national
\nsovereignty.<\/p>\n
"We want to have our own automobile industry in the real
\nsense," he said.<\/p>\n
Concession<\/p>\n
Minister Tunky told Reuters he was unaware of the Japanese
\nthreat, but said he had offered no concessions in separate talks
\nwith American Acting Trade Representative Charlene Barshefsky and
\nJapanese International Trade Minister Shunpei Tuskahara.<\/p>\n
Barshefsky said Washington wanted to resolve the issue through
\nconsultation, but would get tough if it had to.<\/p>\n
"We have also told the Indonesians that we will not hesitate
\nto enforce our rights," she said.<\/p>\n
Barshefsky and Tsukahara met late yesterday for an
\ninconclusive meeting on the stalled microchip talks, ahead of a
\nJuly 31 deadline. But she did not expect the issue to be solved
\nin Christchurch.<\/p>\n
"There have been no breakthroughs, but there has been a
\nsignificant amount of discussion," she said.<\/p>\n
However, a Japanese official told Reuters that Tokyo hoped a
\nnew proposal it tabled yesterday would lay the basis for a speedy
\nbreakthrough.<\/p>\n
APEC groups Australia, Brunei, Canada, Chile, China, Hong
\nKong, Indonesia, Japan, South Korea, Malaysia, Mexico, New
\nZealand, Papua New Guinea, the Philippines, Singapore, Taiwan,
\nThailand and the United States.<\/p>",
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