Japan asks RI to clarify car policy

Japan asks RI to clarify car policy

TOKYO (AFP): A senior Japanese trade official urged Indonesia yesterday to clarify its "national car" policy as Tokyo prepared to file official complaints with the World Trade Organization (WTO).

"We will take necessary steps under international trade rules as soon as we confirm" the Indonesian government's stance, Vice International Trade and Industry Minister Tsutomu Makino told a regular media conference.

Japan says Indonesia's national car policy of granting certain cars preferential tax and tariff treatment violates international trade rules.

It has been waiting to confirm that 4,000 vehicles imported from South Korea under the national car program have avoided tariffs and taxes charged on other imported cars.

Under Jakarta's policy, producers of a so-called national car are granted exemption on import duties and luxury taxes that add about 60 percent to the price of other cars in Indonesia.

PT Timor Putra Nasional -- a company controlled by President Soeharto's youngest son Hutomo Mandala Putra -- was chosen as the first national car supplier and is required to clear an eventual goal of a local content ratio exceeding 60 percent.

In cooperation with Kia Motors, Timor Putra is allowed to import the cars from South Korea until its own factory becomes operational in 1998.

Some 4,000 cars made by South Korea's Kia Motors have arrived at Tanjung Priok port in Jakarta.