Govt, business at odds over U.S. complaints

Dewi Santoso, The Jakarta Post, Jakarta

Complaints from the U.S. at Indonesia's unfair trade policies regarding its commodities have drawn a mixed reaction from the government and the local business community, putting both at odds over the appropriate response to the matter.

Although a businessman called on Saturday on the government to hold talks with the U.S. trade office over the issue, the government said that thus far it had no plans for such a meeting.

Soy Pardede of the Indonesian Chamber of Commerce (KADIN) said that the government should admit that some of its trade policies were not business-friendly. As such, it should engage in more intense liaison with the U.S. trade office to resolve the issue.

However, Director General of Foreign Trade at the Ministry of Industry and Trade Pos Hutabarat defended the government's performance in improving its trade policies.

"The U.S. government has the right to accuse us of such things. As far as the Indonesian government is concerned, we've done our best, and we have, thus far, no plans to hold talks with the U.S. trade office," said Hutabarat.

The Office of the United States Trade representatives (USTR) has issued a report titled The National Trade Estimate Report on Foreign Trade Barriers, identifying 55 nations, including Indonesia, as using unfair trade practices and barriers against U.S. exporters.

"The government needs to admit that many of the existing trade policies are too complicated and should be replaced by simpler ones," said Pardede.

He pointed out, for example, the policy on the importation of chicken parts to meet the halal (permissible for Muslims) certification requirement. Under the existing regulations, the authority to issue the certificate lies with the Indonesian Ulemas Council (MUI), the Ministry of Religious Affairs and the Food and Drug Monitoring Agency (BPOM).

"There's nothing wrong with the halal policy. But the policy should be executed by the Ministry of Industry and Trade, while MUI, the Ministry of Religious Affairs and BPOM should only issue the halal criteria," he said.

Hutabarat, however, said that the government had taken a lot of action to improve its trade policies to meet the wishes of foreign exporters.

"We have zeroed our import duties on chemical and automotive raw materials. We have also reduced our average tariffs to below 7 percent this year, from 7.3 percent in 2003," he said.

As for the U.S. complaint at the high tariff on alcoholic beverages, which now stands at 155 percent, he noted that it could not be lowered as the government had to take both religious and moral considerations into account.

"The U.S. may say a lot of things -- it has a right to do so, but bear in mind that it also has its faults," said Hutabarat.

He highlighted U.S. complaints over the procedure to obtain a trading license for drugs in Indonesia.

"Compared to those in the U.S., our clinical testing requirements are much easier and faster," he said.

He explained that while the U.S. government took 6 years to issue a drug license, Indonesia required only two to three years.

Some trade barriers cited by the U.S. government -----------------------------------------------------------------

1. High rice import tariffs: At present, the tariff is Rp 430 (5 U.S. cents) per kilogram but the Ministry of Agriculture keeps proposing to raise it. 2. The government requires halal certificates for the importation of chicken parts. 3. The customs service uses arbitrary "check prices" on food imports rather than actual transaction prices on importation documents. This raises the effective level of duties on most food product imports. 4. The government restricts the importation of and requires special licensing for the importation of alcoholic beverages, explosives and certain dangerous chemicals. This violates WTO rules, according to the U.S. 5. The requirement for food product producers to register their products at BPOM. 6. The requirement for all consumer products to have labels written in Indonesian. 7. Weak enforcement of Intellectual Property Rights (IPR).