Deadlocked talks not to hurt textile exports to U.S.

JAKARTA (JP): Indonesian textile and garment exports to the United States will not be disrupted despite the failure of the second round of bilateral textile negotiations in Bali last week, the trade ministry announced yesterday.

Although the current bilateral agreement will expire on June 30 it allows Indonesia to continue exports to the U.S. under the old quota arrangements, said Halida Miljani, Secretary of the Directorate General of Foreign Trade who led the Indonesian negotiating team.

The United States is Indonesia's single largest market, importing about US$1 billion worth of textile and garments last year.

Based on the present agreement, Miljani said, Indonesia is allowed to increase the volume of its garment and textile exports to the American market by six percent a year.

The trade official yesterday briefed reporters on the failure of the second round of bilateral textile negotiations due to differences of view regarding several issues.

Miljani said that the United States delegation did not return the favor of Indonesian concessions.

"We have fulfilled their demands on market access by agreeing to lower our import tariffs on apparel to 35 percent, fabrics and made-up articles to 30 percent, yarns to 15 percent and man-made fibers to 12.5 percent," she stated.

The import tariffs now average 40 percent.

She added that Indonesia also had met the U.S. demand for a tougher circumvention ruling regarding the diversion of Indonesian quotas to other exporting countries.

"But the U.S. did not meet our request for increases of between 10 and 20 percent in the quotas of several categories of products," Miljani said.

Specific limits

She said Indonesia also agreed to American requests for specific limits on the exports of bed sheets and wool men's suits without the required evidence of market disruption.

She hastily added, however, that the failure of the negotiations had nothing to do with political issues but merely reflected economic considerations.

"Because the new bilateral agreement will be very important during the 10-year transition period before the textile and garment trade is fully integrated into the new multilateral trade agreements in 2005 the American government seemed to play tough," she said.

The basic quota given before the World Trade Organization comes into force on Jan. 1, 1995 is very important for both sides as it will be the basis for determining the volume of exports that has to be phased into the new WTO agreement during the 10- year transition period.

She also complained that Caroyl Miller, the chief American negotiator, did not seem to have enough authority to be flexible regarding proposed changes during the negotiations.

"We hope the U.S. government will be more flexible in the next meeting," Miljani said.

"We are willing to negotiate when the United States is ready to negotiate," Miljani said. (yns/02)