40% import tax on shrimp proposed

Zakki P. Hakim, Jakarta

The Ministry of Industry and Trade has proposed to the Ministry of Finance that an import tax of 40 percent be imposed on shrimp following demands from the Ministry of Fisheries and Maritime Affairs and domestic farmers.

Minister of Industry and Trade Rini MS Soewandi said on Wednesday that the 40 percent tariff was the maximum a country could impose on the commodity under World Trade Organization (WTO) rules.

"We'll push to the ceiling," she announced.

Currently, Indonesia imposes zero tax on the commodity.

Earlier, Minister of Fisheries and Maritime Affairs Rokhmin Dahuri said his office had sent the request to the Ministry of Industry and Trade in January and planned to send a similar proposal to the Ministry of Finance.

He said that imported shrimp started flooding the market last year and domestic shrimp farmers could not compete given the low prices of the imported shrimp.

"If the Ministry of Industry and Trade cannot ban imports of shrimp, then it should just apply a 40 percent import duty," Rokhmin said.

Pos M. Hutabarat, director general of international cooperation at the Ministry of Industry and Trade, said the ministry was studying the case but had thus far been unable to find enough reasons to launch an antidumping probe. Under WTO rules, a country can launch an antidumping probe into an imported product only if the imports hurt local industries.

"Our data show that shrimp imports account for only 2 percent to 3 percent of national consumption. The figure cannot serve as a good basis to launch a probe into possible dumping practices," he said, referring to data from the Central Statistics Agency (BPS).

BPS data say the country exported 90,195 tons of frozen shrimp from January to September last year, up from 80,253 tons in the same period of 2002. Shrimp imports stood at 2,205 tons from January to November last year, a slight increase from 2,015 tons in the same period of the previous year.

Pos said the rise in shrimp imports could indicate a rise of "transshipment" practices.

"We should be aware that imported shrimp can be easily re- exported with an Indonesian label on it and nothing can be done to prove or trace the origin of the commodity," he said.

He said shrimp that had been flooding Indonesia came from countries affected by the anti-dumping policy recently imposed by the U.S. The countries include China, Vietnam, Thailand, Malaysia and India.

Indonesian Fisheries Industry Association (Gappindo) deputy head Johanes Kitono also voiced suspicion of transshipments.

"This might be called 'shrimp laundering'. Since Indonesia is not affected by the U.S. antidumping policy, traders could first send their shrimp to Indonesia before exporting them to the U.S.," he said.

He said his organization would prefer that a ban be imposed on shrimp imports, since, despite the high tariff, shrimp imports would continue flooding the local market as long as the U.S. maintained the antidumping policy.

He said Indonesia did not need to import shrimp as the nation had a production surplus. Indonesia produces 260,000 tons of shrimp annually, 30,000 tons of which are exported.