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)