Indonesian importers threaten to boycott Japan

Indonesian importers threaten to boycott Japan

JAKARTA (JP): The Indonesian Importers Association yesterday
threatened to boycott Japanese goods if Japan retaliates against
Indonesia's controversial national car policy.

The association's chairman Amirudin Saud yesterday expressed
indignation over Japan's move of taking Indonesia's national car
policy to the World Trade Organization (WTO).

"If the consequence of Japan's complaint to the WTO brings any
economic sanction toward Indonesia, the association will
retaliate by boycotting Japanese products, including automotive
products," Amirudin told a media conference.

Japan is currently Indonesia's largest trading partner and
largest source of foreign direct investment and foreign loans.

Indonesia's exports to Japan increased to US$12.59 billion
last year from $10.92 billion in 1994 and $11.17 billion in 1993.
Almost 50 percent of the exports consisted mainly of oil and gas.
Meanwhile, its imports from Japan increased to $9.2 billion last
year from $7.73 billion in 1994 and $6.23 billion.

As of last July, Japan remained the largest investing country
in Indonesia with cumulative investment commitments of $5.16
billion since January this year, and $25.27 billion since 1967.

Amirudin said the association's move was not influenced by the
government or any other party, and that it was a genuine move of
the association to defend the nation's interests.

Japanese auto firms have had ample opportunity to help develop
Indonesia's automotive industry. However, they are seemingly
reluctant to transfer their automotive technology to Indonesia,
Amirudin said.

"Japan also takes a discriminative policy. It helps Malaysia
in developing the latter's national car, called Proton. But it
opposes Indonesia's national car program," he remarked.

He accused Japan of trying to once again dominate Indonesia
economically by forcing Indonesia to remain dependent on Japan's
automotive technology.

Japan occupied Indonesia for three and a half years, from 1942
to 1945. "Japan's actions hurt the feelings of Indonesians," he
said.

He also threatened to boycott goods from other countries which
try to block Indonesia's national car program. "The association
warns developed countries not to use the WTO as a means to
pressure developing countries, like Indonesia."

Japan, the European Union and the United States have formally
requested consultations with Indonesia, under the auspice of the
WTO, over the latter's national car policy. Consultation is the
preliminary step in the WTO dispute settlement mechanism.

Indonesia's national policy, announced in February, grants
tariff and luxury tax exemptions for three years to PT Timor
Putra Nasional, a company controlled by President Soeharto's
youngest son Hutomo Mandala Putra, to develop a national car, the
Timor.

Common

Senior economist I Nyoman Moena, who was present at Amirudin's
media conference, said that he could understand the importers
association's move, saying that such threats are common in
international trade.

"This kind of move is necessary, so that the government is not
alone in protecting national interests," he said.

Moena, however, believed the disputes would not lead to a
trade war as long as the governments of countries engaged in the
disputes remain committed to treating current disputes separately
from their overall economic relations.

He said the introduction of Indonesia's national car policy is
very important to prepare the country's automotive industry to
face free trade among members of the Association of Southeast
Asian Nations (ASEAN) by 2003.

In the automotive sector, Moena said, the country most ready
to compete in such a free market is Malaysia, with its Proton
cars. Indonesia, on the other hand, is totally unprepared for
competition, while its market is the most potential in ASEAN,
which groups Brunei, Indonesia, Malaysia, the Philippines,
Singapore, Thailand and Vietnam.

"If we do not develop our own cars, our market will be flooded
by cars from other countries and it will endanger our current
account deficit. Therefore, this national car program is very
important for Indonesia to secure its current account and local
market," Moena said. (rid)