Japan-RI talks on car policy end in stalemate
Japan-RI talks on car policy end in stalemate
GENEVA (AFP): Talks between Indonesia and Japan Tuesday over the former's controversial national car policy ended inconclusively with no proposals put forward that would change the status quo, a Japanese government official said.
"In today's exercise they (Indonesia) answered some of our questions, but they did not indicate whether the program would be revoked, revised, or anything like that," the official said, admitting the outcome was "not satisfactory."
Japan, the United States and Europe want Indonesia to revoke measures favoring its national automobile, which they say breach international trade rules.
A first round of bilateral talks was held in early November, and U.S and European delegations are to meet with Indonesia separately in the next two days to try to hammer out a solution.
The trio lodged their complaint with the WTO in October. A 60- day period allowed to consult has ended and a logical next step, barring a settlement, is a request for an arbitration panel to examine the case.
"No decision has yet been made yet, but we are not eliminating the possibility (of a panel)," the official said, adding internal consultations in Tokyo would follow.
Japan will also keep abreast of how talks fare with the other two parties involved and expects to receive written answers from Indonesia on a number of points that were not clarified in Tuesday's talks.
"Some of the questions we raised were not answered, so they will come up with replies in the near future."
The core of the trio's complaint centers on Indonesia's discrimination under the WTO's national treatment rules, which hold that no special favors may be doled out to any particular trading nation.
Indonesia's "national" car is currently being imported from South Korea by a joint venture between Kia Motors and PT Timor Putra Nasional.
Timor Putra, granted sole car supplier rights, is exempted from paying import duties and luxury taxes, which add about 60 percent to the price of other cars in Indonesia. The company is run by President Soeharto's youngest son, Hutomo Mandala Putra.
The cars, which will eventually need to meet a 60 percent local content target, will continue to be imported until production facilities are ready at home, on tap for 1998. About 10,500 Timor Sedans have so far been brought in.
"What we find problematic is not so much local content as the violation of the principles of the WTO, such as MFN (Most Favored Nation status) and national treatment," said the official, adding that Japan had a "strong case. "
Japan's International Trade and Industry Minister Shinji Sato last month described as "extremely regrettable" the fact that the Indonesians had not put a "single proposal" on the table at the last round of talks.
He said Jakarta has no plan to accord the company the same tax exemption for another commercial vehicle it plans to build in cooperation with Kia.
"Under the current set of consultations, it is not a confrontational argument. It is a cool exchange," the government official said. "This is part of an on-going process. You shouldn't be over-optimistic, but I'm very unagitated."