Australia, RI to boost trade

NUSA DUA, Bali (JP): Australia and Indonesia agreed here yesterday to seek a mutual recognition agreement on standards and to remove non-trade barriers to improve their two-way trade.

Australian Foreign Minister Alexander Downer and Indonesian Coordinating Minister for Production and Distribution Hartarto also agreed to further reduce tariff barriers.

The two ministers officially opened the two-day Australia- Indonesian business conference and exhibition, held by the Australia-Indonesia Business Council, here yesterday.

Downer acknowledged that Australian authorities often held up fruit and other foodstuffs imported from Indonesia and many other countries to ensure they met its standards, especially relating to health.

The holding up of such imports often creates inconvenience and imposes additional costs on exporters.

"Indonesia would like to see Australia implement more favorable and transparent standards for imported food so they do not become disguised non-trade barriers," Hartarto said at the opening of the conference.

"Furthermore, simpler and more practical customs procedures and inspection methods should be applied so costs will not be increased," he said.

Responding to Hartarto's remarks, Downer said Australia never used standards as disguised barriers. The problem was that its standards had not been mutually recognized by its trading partners.

He said: "We do not stop goods from anywhere, but the issue is inspection of goods, and this is something to do with standards. The reason that they are holding up goods from a lot of different countries is simply because the standards have not been mutually recognized.

"Therefore, one of the things we want to take up quickly between Australia and Indonesia is mutual recognition agreement on standards," Downer said.

He noted that there were only around 20 items out of hundreds of Indonesian exported goods to Australia that undergo quarantine inspections. This is in comparison to some 100 items from Thailand and 65 from the United States.

Downer also acknowledged that the Australian government imposed antidumping duties on two Indonesian export products to Australia. He did not specify the products.

"But there are many other products from many countries subject to antidumping duties in Australia," Downer told journalists.

Besides eliminating import duties, Hartarto also called on Australia to reduce import tariffs, especially on products in which Indonesia had a competitive edge, such as textiles, clothing, leather and footwear.

He contended that such a reduction was necessary considering that Indonesia still suffered a lop-sided trade imbalance with Australia.

Indonesia's trade deficit with Australia increased 37 percent to A$1.44 billion (US$1.1 billion) last year from A$1.04 billion in 1995.

Australia's exports to Indonesia rose by 32 percent to A$3.15 billion last year from A$2.39 billion in 1995, while its imports form Indonesia rose by 27 percent to A$1.7 billion from A$1.3 billion.

"The Indonesian government would indeed like to see its trading partners, including Australia, be willing to reduce the existing peak tariffs on Indonesia's major export products, among other things textiles, leather products and footwear," Hartarto said.

Downer said Australia had taken Indonesia's concerns into consideration and had decided to lower tariffs on textiles, clothing and footwear within the next two and a half years.

"Certainly between now and 2000, there will be a reduction in tariff protection on textiles, clothing and footwear. And therefore, there will be increasing opportunities for Indonesian exporters," Downer said.

Even now, he said, Indonesian exports traveled smoothly to Australia with very few obstacles and added "there were fewer difficulties in terms of Indonesian access to the Australian market."

Over the past decade, Indonesia's share of the Australian market has grown from less than 1 percent to more than 2 percent, while Australia's share of the Indonesian market has risen from under 4 percent to well over 5 percent now.

"As we continue to reduce our protection in Australia, I encourage the Indonesian government to reduce its protection as well," Downer said.

He said that if the Indonesian government lowered its tariffs on automotive parts and components, many more Australian parts manufacturers would move to Indonesia.

"Australian components manufacturers, I think, can develop very good relationships with Indonesian car companies, and we would like to see that relationship develop in the next few years," he said.

Hartarto responded that Indonesia was committed to continuing deregulation and that later this month, the government would announce a new package of deregulatory measures. (rid)

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