Govt urged to protect tableware industry
The Jakarta Post, Jakarta
The Indonesian Trade Safeguard Committee (KPPI) announced on Saturday that it had recommended to the government that it take protectionist measures for the local ceramic tableware industry through the imposition of additional tariffs over the next three years on imports.
The Committee has recommended that the government place an additional import duty of Rp 1,600 (17 U.S. cents) per kilogram on imports of the products in the first year and gradually reduce this to Rp 1,400 and Rp 1,200 in the second and third year respectively.
The so-called "safeguard" tariff wall should be imposed on imports from China, Hong Kong, South Korea, Singapore, Japan, Taiwan, Germany, Italy, the United Kingdom, the United States, France and Australia, the committee recommends.
It has excluded ceramic tableware exports from India, Malaysia and Thailand on the basis that they are developing countries whose exports are "harmless" to the country.
KPPI chairman Ridwan Kurnaen said the committee forwarded the recommendation to Minister of Trade Mari E. Pangestu last week.
"The Ministry of Trade and Ministry of Finance will have the final say. We have done our job in providing recommendations based on our investigation," Ridwan said.
The KPPI agreed in October to investigate whether damage had been inflicted on the local industry by surging imports of ceramic ware in response to complaints from petitioners ceramic tableware manufacturers PT Lucky Indah Keramik and PT Queen Setyabudhi Ceramics -- whose combined production accounts for about 55 percent of national output.
The committee found that the commodity imports surged by almost three and a half times from 11,603 tons in 1999 to 40,018 tons in 2003.
The surging imports boosted the imported products' share of the domestic market from 32 percent in 1999 to 61 percent in 2003, overwhelming local ceramic tableware sales.
After evaluating trends in the local industry as regards sales, profits and losses, market share, production, capacity utilization, wages and employment, the committee concluded that the imports had caused serious injury to the industry.
"In 2002, total sales started to drop, although profits have been actually declining since 1999, while the biggest loss was suffered in 2003. The deteriorating performance is a result of a surge in the import of cheaper goods compared to local products."
"Such a situation will result in a reduction in capacity utilization and eventually large-scale lay-offs," the announcement said.
Indonesian Ceramic Industry Association (Asaki) foreign affairs director, Indra Kangean, said the industry used to directly employ 20,000 workers, but now only employed 10,000.
Under WTO rules, the government can impose a provisional measure on an imported product for a maximum of 200 days after the country's safeguard committee launches an official investigation.