China to exclude CPO from ASEAN-China FTA plan
China to exclude CPO from ASEAN-China FTA plan
Zakki P. Hakim, The Jakarta Post/Jakarta
China is expected to exclude crude palm oil (CPO) products from a
planned ASEAN-China free trade agreement by maintaining a tariff
wall in a bid to protect its domestic vegetable oil industry from
a massive inflow of cheaper CPO products from Malaysia and
Indonesia.
Director for regional cooperation at Indonesia's Ministry of
Trade, Eliver Radjagoekgoek, said China had included CPO on its
sensitive and highly sensitive list of products to be protected
against the trade liberalization scheme.
"China wants to put a brake on CPO imports from Malaysia and
Indonesia. China has its own (vegetable oil) industry to take
care of," Eliver said on Wednesday.
In addition to CPO, China also included wood and paper
products on its sensitive and highly sensitive list.
On its accession to the World Trade Organization, China
committed to apply the same import tariff on all wood and paper
products.
If China applies a lower rate on wood and paper products from
ASEAN countries, it must impose the same lower rate on products
coming from countries outside the region. China also imports wood
and paper products from Brazil and Canada.
Eliver said Indonesia had no objections to China including the
products on the exclusion list, as long as all countries received
equal treatment when exporting the commodities to China.
However, it was not immediately clear which specific CPO
products and wood and paper products were excluded from the
liberalization scheme.
CPO and wood and paper products are among Indonesia's top
exports to China. Total trade between the two countries reached
US$10.2 billion last year, producing a surplus over $1 billion
for Indonesia.
Overall, China has 259 categories of sensitive and highly
sensitive goods, said the ministry's deputy director for inter
and intra-regional cooperation, Retno Kusumo Astuti.
Indonesia has 398 categories of sensitive and highly sensitive
goods, including rice, sugar, soybeans, corn, automotive
components, textiles, garments and ceramic tableware, Retno said.
The inclusion of certain goods on the sensitive and highly
sensitive list was based on the request of local industry
players, Retno said.
The ASEAN-China free trade agreement is expected to be
formalized during a summit in Vientianne, Laos, later in
November.
Under the agreement, most goods traded between ASEAN and China
would have their tariffs slashed starting Jan. 1, 2005,
eventually reaching zero import tariffs by 2010.
Meanwhile, tariffs on sensitive goods will be slashed starting
in 2012, before being fully liberalized in 2017, with the
exception of highly sensitive goods which would retain a certain
level of import duties.