Indonesia to resume car talks with Japan, EU and U.S.

Indonesia to resume car talks with Japan, EU and U.S.

JAKARTA (JP): Indonesia will continue to seek bilateral
solutions to the dispute over its national car policy, but has no
intention of offering compensation to any of the parties
protesting the policy.

Minister of Industry and Trade Tunky Ariwibowo, said yesterday
that until the next meeting of the World Trade Organization's
(WTO) Dispute Settlement Body later next month Indonesia would
seek new rounds of bilateral talks with Japan, the United States
and the European Union.

The WTO's body's next monthly meeting will be in Geneva,
Switzerland, on June 25.

"There will be no compensation. What we will have will be
negotiations, a give-and-take situation. It must be equal," he
said without elaborating.

Tunky refused to give details of how Indonesia would respond
to the charges laid by Japan and the EU.

He also refused to explain how Indonesia would prevent Japan
and the EU from pushing ahead with their requests for separate
panels, without having to offer compensation.

In a meeting of the WTO's Dispute Settlement Body (DSB) on May
23, Indonesia blocked the EU's request to set up a dispute
settlement panel to decide whether the national car project
breached WTO rules.

In closed-door DSB meetings, a member country has the right to
stop a panel being formed the first time it is sought by a
complainant.

Indonesia's decision to block the EU's request came weeks
after it made the same move in response to a similar request by
Japan late in April.

Japan could have formally made a second request this month,
but did not do so.

The U.S., the third complainant, has not yet decided to take
the dispute to WTO's DSB.

Earlier reports quoted official sources in Tokyo saying that
Japan decided to postpone the creation of a panel through a
second request because Indonesia was still preoccupied with the
general election (tomorrow).

Bilateral talks with Japan are expected to resume early next
month.

The 15-member EU is expected to make a second request for a
panel at the next meeting on June 25, when Japan could also make
a second request.

Indonesia cannot block a second request for a dispute panel to
be set up.

If a panel of independent judges is set up it will have nine
months to judge the case, and if Indonesia decides to appeal the
panel's decision the process will take about six months at the
most.

"We shouldn't say (the request for a panel) indicates the
failure of our negotiators in Geneva to do their job. We tried
our best, but it is the EU's right to take the issue to a panel,"
Tunky said.

PT Timor Putra Nasional, a joint venture between a company
controlled by President Soeharto's youngest son, Hutomo Mandala
Putra, and South Korea's Kia Motors, was granted tax and tariff
relief to build a national car early last year.

The EU, Japan and the U.S. have said the incentives
discriminate against competitors.

EU Ambassador Ron Abbott said last week the car program
violated a series of rules regulating international trade -- the
General Agreement on Tariffs and Trade (GATT), the Trade-Related
Investment Measures (TRIMS) accord and the Agreement on Subsidies
and Countervailing Measures.

Indonesia's so-called national car is being imported fully
assembled from South Korea's Kia Motors while the joint venture
builds its assembly plant in West Java.

Timor Putra is said to have sold less than 1,000 Timor cars a
month since its launch in October, though sales have reportedly
risen in recent weeks. (pwn)