Government set to merge KADI and KPPI

Zakki P. Hakim, The Jakarta Post/Jakarta

The government is to merge the Indonesian Anti-Dumping Committee (KADI) and the Indonesian Trade Protection Committee (KPPI) in an effort to improve measures to protect local industry from unfair trade practices, an official says.

"Merging the two committees is expected to improve our efficiency in handling cases of anti-dumping, subsidies and safeguard measures," KADI chairman Ridwan Kurnaen told reporters on Friday.

A draft government regulation on the merger was being discussed by related institutions including the Ministry of Trade, Ministry of Industry, Ministry of Finance, Ministry of Agriculture, Ministry of Fisheries and Maritime Affairs and the Ministry of Justice and Human Rights, he said.

Ridwan, who is also chairman of the KPPI, hoped the government regulation would be deliberated before the end of the year.

His hopes might have some grounds as President Susilo Bambang Yudhoyono in his early days at office had said that the government was now determined to maximize the use of the "injury clause" to curtail the excesses of trade liberalization.

Committees such as KADI and KPPI would enable Indonesia to adopt free trade and at the same time safeguard some of its industries -- and eventually jobs too -- against "unfair" imports by using a clause permitted under the World Trade Organization rulings.

KADI was established in 1996 based on Law No. 10/1995 on Customs, while KPPI was formed later in 2003 with a Presidential Decree No. 84/2002 on safeguard measures.

The two independent committees give recommendations for a sector to be protected using temporary tariff barriers upon input from injured domestic industries that have suffered from the inflow of cheaper imported products.

It is something that Indonesia has not applied optimally in the past while other countries, including the U.S. and Europe, invoked them freely in the name of protecting national interests.

Industry players as well as government trade officials have long complained that the injury clause could not be applied effectively due to inter-ministerial coordination problems.

Between 1996 and 2004, out of 31 antidumping petitions submitted to KADI, only nine cases went through to eventually imposing antidumping duties. While the other five cases are still under investigation, the remaining cases were closed, reports said.

KPPI, meanwhile, had the government imposed a 30 percent temporary import duty as a safeguard to protect the domestic tableware industry from surging imports.