Government to help importers give Australia a miss

Government to help importers give Australia a miss

JAKARTA (JP): Minister of Trade and Industry Rahardi Ramelan
said on Monday the government would help in finding substitute
supply sources for local importers who wanted to switch their
imports of essential raw materials from Australia.

"The government is certainly obliged to support local
importers whose business is affected (by boycotts by some
Australian associations) to find alternative country sources for
the needed material."

He was commenting on the recent plan of local textile
businesses grouped in the Indonesian Textile Association (API) to
stop importing cotton from Australia amid increasingly strained
diplomatic relations between the countries.

He said importers of sugar and meat were also considering
finding alternatives sources to Australia following the decision
of local wheat importers to stop importing from Australia.

Australian unions boycotted goods bound for and originating
from Indonesia for a week in an effort to pressure the Indonesian
government into restoring order in East Timor.

The unions halted the boycott last weekend, but threatened to
reimpose it if Indonesia placed restrictions on the multinational
peacekeeping force in East Timor.

Rahardi was upbeat that the government would be able to help
local importers to continue their business activities amid the
threat of a boycott.

"There are lots of alternative sources. For cotton, for
example, we have China, Egypt, Uzbekistan and Kazakhstan. We
won't have problems."

Asked about the possible Australian reaction to the
government's assistance to the importers, Rahardi said: "Who
cares? I've never given a thought to Australia's reaction."

Separately, the chairman of the Indonesian Association of Pulp
and Paper (APKI), Muhammad Mansur, told Antara that local paper
manufacturers would switch their imports of pulp from Australia
to Canada and the United States.

"We're very worried about the boycotts by Australian workers
who refused to handle Indonesian goods... we'll increase our
imports of pulp from Canada and the United States."

He said the imports from Australia constituted about 30
percent of the country's entire imports of pulp.

Imports of pulp from Australia increased to 1.8 million metric
tons in 1998 from 1.2 million tons in 1997. Muhammad said this
year's volume of imports was expected to be similar to 1998.

He said Australia stood to lose more in the boycott because
Indonesia imported more Australian pulp than the latter imported
Indonesian paper products. Indonesia's exports of paper to
Australia constitute 10 percent of the country's entire annual
export volume.

He said the beneficiaries of the boycotts were those countries
chosen as alternative sources.

"The United States, for example, is benefiting from our
switching of imports... it has even offered special prices to
keep Indonesian importers obtaining the goods from them."

Meanwhile, Australian trade minister Mark Vaile said in
Canberra on Monday he was concerned about Rahardi's statement but
he believed that Indonesian companies were "happy" to trade with
Australia.

"Our information tells us that Indonesian companies are happy
to continue their commercial relations with Australia," he told
Reuters.

Australian cotton and wheat exporters also expressed concern.

"If there is some government directive like that, then
obviously there is a threat to our industry," Gordon Cherry,
chairman of the Australian Cotton Shippers Association, said in
Sydney. (prb/cst)