RI's non-tariff import barriers remain high<\/p>\n
JAKARTA (JP): Despite its continuing deregulation measures,
\nIndonesia still maintains a relatively high level of non-tariff
\nimport barriers, economists said yesterday.<\/p>\n
William E. James, a senior international economist at the
\nWashington-based Nathan Associates Inc., told a one-day seminar
\nhere that the government is still imposing barriers within a
\nnumber of sectors, especially in the agriculture and agro-based
\nprocessing industries, as well as in the services sector.<\/p>\n
\"In spite of progress in deregulations, a number of sectors
\nare characterized by protection,\" James said at the seminar,
\norganized jointly by the Association of Indonesian Economists and
\nthe United States Information Service.<\/p>\n
\"We must remember that it is not the average level of
\nprotection that we are concerned about ... but the costs to
\nconsumers,\" he added.<\/p>\n
To illustrate, James pointed out that a number of agricultural
\ncommodities which play a significant part in most people's lives
\n-- including rice, wheat, flour and sugar -- are still largely
\ncontrolled by the National Logistics Agency.<\/p>\n
As a result of such protection, sugar prices in Indonesia are
\nwell above international prices. In addition, the country's food
\nprocessing industry is running at a high cost structure, as their
\nimported raw materials are obstructed by both tariff and non-
\ntariff barriers.<\/p>\n
While commending the government's decision to transfer import
\nduty surcharges into the existing tariff structure, James
\nexpressed his dissatisfaction over the latest? deregulation
\npolicy, which did not effect other existing non-tariff barriers
\nsuch as those on local content requirements, investment
\nlicensing, state procurement procedures and export restrictions
\non certain products, especially logs.<\/p>\n
He said the log export restriction, in the long run, could
\ncause uncertainty for investments, export prospects and the
\nfuture performances of companies operating in the downstream
\nindustry.<\/p>\n
He noted that the services sectors here -- especially banking,
\ninsurance, capital market and distribution -- are still highly
\nregulated.<\/p>\n
\"The financial market has been liberalized, banking in
\nparticular. But there is much that still has to be done,\" James
\nsaid.<\/p>\n
Not alone<\/p>\n
Indonesia, however, is not alone in protecting the services
\nsectors and in preserving a number of non-tariff barriers, said
\nGary Hufbauer, a Reginald Jones senior fellow of the Washington-
\nbased Institute for International Economics.<\/p>\n
He said industrialized countries like Japan, the United
\nStates, Canada and South Korea are also maintaining their non-
\ntariff barriers, either through quantitative restrictions,
\ntechnical standards and conformity assessment, customs house
\ntyranny or anticompetitive practices.<\/p>\n
He noted that rice exports to South Korea and Japan, for
\ninstance, are very much restricted by 500 percent tariff-
\nequivalent barriers. Also, exports of dairy products to Canada
\nare restricted by 300 percent tariff-equivalent barriers.<\/p>\n
To eliminate such quantitative restrictions, Hufbauer
\nsuggested that governments transfer all the restrictions into
\ntariffs, which are then reduced gradually.<\/p>\n
Speaking on non-tariff barriers in the form of technical
\nstandards and conformity assessment, Hufbauer said their by-
\nproducts are more costly to businesses entering a country which
\nimposes such standards.<\/p>\n
Pharmaceutical products exported to the United States, for
\ninstance, have to undergo a set of laboratory tests before
\nentering that country. One set of such tests can cost the
\nexporter some US$200 million.<\/p>\n
\"And the United States has over 90,000 such technical
\nstandards,\" Hufbauer said.<\/p>\n
To reduce such technical standards, he suggested that
\ngovernments continue with their technical assistance projects,
\nallow open participation from other countries and agencies and
\nbuild mutual recognition.<\/p>\n
Touching on the customs tyranny, Hufbauer suggested the
\nintroduction of preshipment inspection for imports -- a practice
\nwhich has been abandoned by all industrialized countries --
\nrandom inspection and an electronic customs clearance system.<\/p>\n
He then encouraged governments to gradually remove all non-
\ntariff barriers so that there will be more and more efficient
\ninvestment, more rapid introduction of new processes and products
\nas well as quicker upgrading of skills.<\/p>\n
\"A continued reform promises Indonesia a generation of
\neconomic growth by 5 percent to 6 percent annually, and per
\ncapita income of $3,000 to $4,000 by 2010,\" Hufbauer said. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ris-non-tariff-import-barriers-remain-high-1447893297",
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