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)