Car policy talks to continue: Tungky

JAKARTA (JP): Indonesia is determined to continue bilateral talks with Japan and the European Union (EU) on its national car policy despite the World Trade Organization's (WTO) approval of a panel to assess the issue, Minister of Industry and Trade Tunky Ariwibowo says.

Tunky said yesterday Indonesia would proceed with bilateral talks with Japan and the EU "because the panel will be held over a long period of time".

He said he had heard the United States also planned to seek a WTO dispute panel on the issue.

Reuters reported from Geneva yesterday that the U.S. request was on the agenda of the next meeting of WTO's Dispute Settlement Body (DSB).

U.S. sources said Washington would not object to joining the EU-Japan panel which, once constituted in the next 20 days, would have from six months to nine months to come up with a ruling.

But Indonesia can block the U.S. request at the coming DSB meeting on June 25, as this will be the first time Washington has formally asked for a panel. The next time, the request will be automatically approved by the DSB.

Tunky said yesterday that Indonesia would block the U.S. request as soon as it was submitted to the DSB.

Tunky said his team of negotiators was currently trying to find out if there was a ruling against conducting bilateral talks during a panel investigation.

"As long as isn't, we will continue to negotiate," he said, as quoted by Antara.

AFP reported from Tokyo yesterday that Japan had also pledged to press ahead with bilateral talks over the issue in parallel with the panel process.

"The setting up of the panel is just one definite step," said Shinji Sato, Japan's minister of international trade and industry. "We hope this will give an impetus to discussions between the two countries."

WTO on Thursday agreed to create a panel to look into complaints from Japan and the EU that Indonesia's national car policy violated open trading rules.

Approval for a panel was automatic as earlier requests by both Japan and the EU were blocked by Indonesia.

Japan, the EU and the U.S. argue that the policy, aimed at boosting Indonesia's domestic car industry, but so far only aiding a firm headed by one of President Soeharto's sons, ran against several WTO accords.

Indonesia has denied that the import and luxury tax concessions enjoyed by the national car producer PT Timor Putra Nasional, which currently produces its Timor sedans at South Korea's Kia Motors Corp's plant, breached WTO rules.

Tunky said yesterday that his team of negotiators had "prepared everything and will continue to do so".

"We have long anticipated the possibility of Japan and the EU taking the issue to the WTO panel, so everything is ready and solid," he said.

Chairman of the Japan-Indonesia Economic Cooperation Agency, Hirokazu Nakamura, said Japanese business leaders would help soften Tokyo's stance on the national car issue.

He was quoted by Antara as conceding here yesterday that a WTO panel was needed because Japan wanted to see Indonesia's national car policy follow existing WTO rules.

Earlier this month, the government ordered its offices, local administrations and state companies to include the national car, Timor, in their sedan purchase programs in another bid to bolster national car sales.

Other efforts to make the national car project a success include Timor Putra's plans to raise US$690 million in syndicated loans from domestic banks to finance the construction of its assembly plant in West Java.

The domestic bank consortium will comprise state-owned Bank Dagang Negara, Bank Ekspor Impor Indonesia, Bank Negara Indonesia, Bank Rakyat Indonesia and private banks Bank Central Asia, Bank Danamon, Bank Niaga, BDNI and Bank Umum Nasional.

Bank Rakyat Indonesia's president, Djokosantoso Moeljono, said Thursday that no one had pressured the banks into joining the consortium.

"We did it because of our own consciences," he said, without saying how much his bank would chip in to the $1.3 billion project.

But he said he was still waiting for a feasibility study report from KPMG Hanadi Sujendro consultants on the project. (pwn)