Government asks for WTO ratification

JAKARTA (JP): Minister of Trade S.B. Joedono formally asked the House of Representatives (DPR) Saturday to ratify the establishment of the World Trade Organization (WTO), which will administer the new international trade accord.

The minister said in a DPR plenary session that the implementation of the new trade treaty would benefit the Indonesian economy even though a number of commodities would face stricter competition from imported products.

"The ratification of the world trade treaty will further promote our exports, especially those from the non-oil sector," he said in explanation to the House members.

He was discussing the bill on the WTO submitted by the government to the legislative body on Aug. 19.

Indonesia is one of the signatories of the world trade pact, the General Agreement on Tariffs and Trade (GATT), but its implementation in the country requires the House's ratification.

Joedono said that the government wants the bill to be implemented nationwide in January 1995, the date of the GATT's implementation worldwide, so that there would no delay in the execution of the treaty.

The head of the GATT, Peter Sutherland, said last week that the new trade pact would be endangered unless the big powers moved urgently to ratify it.

The pact was signed by around 125 countries in Morocco in April, after seven years of tough negotiations on cutting tariffs and on opening markets.

To administer its vast system of trading rules -- on various sectors, including farm produce, industrial goods, services and patents -- it forms a new World Trade Organization (WTO), which will administer the GATT.

The GATT was set up in 1948 as a temporary body pending creation of an International Trade Organization (ITO) -- which was subsequently sunk by U.S. Congressional opposition.

RI products

In the House's plenary session yesterday, Joedono acknowledged that the world trade treaty would affect a number of Indonesia's protected farm products, including rice, cloves, milk, soybeans, garlic, wheat flour and sugar.

However, the impact will be minimal since Indonesia, as a developing country, is given special and differential treatment, he said.

"It allows Indonesia not to commit to the 1988 Montreal Agreement, but instead to the 1991 GATT guidelines," he said.

He added that the Montreal treaty urged member nations to reduce import tariffs of each product by 33.3 percent, while the 1991 GATT guidelines still allow developing countries to impose a maximum import tariff of 40 percent.

According to GATT officials, 26 of the treaty's 125 signatories have now ratified the accord. (hen)