Importers grouping opposes safeguard
The Jakarta Post, Jakarta
Surging ceramic imports in the past five years has prompted the Importers Association of Indonesia (GINSI) to oppose any proposed safeguard measures for the local ceramic industry, although the imports have jeopardized the local industry's existence.
"Safeguards mean that prices will rise and consumers will lose," said GINSI chairman Amirudin Saud in a press conference on Wednesday. "We have to fight such a protectionist policy."
The association was responding to the Indonesian Trade Safeguard Committee (KPPI)'s move last month that recommended that the Ministry of Trade and Ministry of Finance impose an additional Rp 1,600 (16 U.S. cents) per kilogram as a safeguard measure on tableware imports on top of the existing 30 percent import duty.
Saud said the 30 percent duty, which was raised from 5 percent at the start of this year, was enough to protect the local domestic industry from the influx of imports and that additional measures would be excessive.
He asserted that it was the weakness of the domestic companies for not being able to compete against the imports, which reached more than 50,000 tons last year and accounted for roughly 64.5 percent of ceramics available on the domestic market.
He said local ceramic tableware companies were losing out to imports, roughly 95 percent of which came from China, due to mismanagement, inefficient operations and low productivity.
He also questioned the domestic industry performance as a whole, whose workers are only half as productive as the Chinese.
"Increased productivity translates into lower prices," said Saud. "Any protection measures should not be given to the ceramics industry, which is inefficient and over protected."
He said the ceramics industry had not improved efficiency despite the fact that it had benefited from a 40 percent import duty imposed on ceramic tableware for 10 years from 1991 to 2001.
The KPPI -- a government organization investigating threats to the domestic industry caused by surging imports -- recommended the formal safeguard measure, which is a mechanism allowed under the World Trade Organization (WTO), after concluding that the surge in tableware imports caused the domestic industry's market share to drop from 68 percent in 1999 to 35.5 percent in 2004.
In its report to the WTO, KPPI said the low price of the imports, which were on average 32.48 percent lower than domestic products, had led to substantial monetary losses to the local companies and significant reduction in people employed in the sector.
"There is clear evidence of the causal link between the recent growth of imports of the product under investigation and the injury caused to the domestic industry," said the KPPI in its report, which was filed in May.
According to the Indonesian Ceramic Industry Association (Asaki), about 10,000 Indonesian workers have lost their jobs as a result of the closure of domestic ceramic tableware firms.
Asaki blamed the cheap imports, which had surged by almost five-fold from the 11,603 tons imported in 1999, for the closures. (002)