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."