40% import tax on shrimp proposed

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.