Japan to take RI's car policy to WTO

Japan to take RI's car policy to WTO

TOKYO (AFP): Japan's vice trade minister warned yesterday that Tokyo would take Indonesia to the World Trade Organization (WTO) as soon as it could confirm cars imported from South Korea had received preferential treatment.

Speaking at a news conference, vice international trade and industry minister Tsutomu Makino said Indonesia's policy to give preferential tariff treatment to a specific auto maker was "clearly against the WTO rules."

Makino said the ministry would try to find out how the Indonesian government would actually treat the imported cars made by South Korea's Kia Motors Corp.

He said international trade and industry minister Shinpei Tsukahara would visit Indonesia this month but added the visit would not be associated with the auto issue.

Some 2,000 cars made by Kia Motors arrived at Tanjung Priok port in Jakarta last week, and nearly half of them had been transferred to warehouses in Cengkareng north Jakarta, a local port official said.

The imported cars are expected to be sold under Jakarta's new auto policy introduced in February, which exempts local producers of a national car from import duties and luxury taxes that add to about 60 percent of the price of a car in Indonesia.

Under Indonesia's national car policy, which would eventually require 60 percent local production content, only PT Timor Putra Nasional -- a company controlled by President Soeharto's youngest son Hutomo Mandala Putra -- qualified for the exemptions. It was allowed three years to achieve the local content target.

PT Timor Putra is allowed to import the cars until the firm's own factory becomes operational in 1998.

The national car program has been criticized by the United States, Japan and the European Union, all of which maintain the policy breaches agreements of the WTO, successor to the General Agreement on Tariffs and Trade.

Japanese car makers hold a 90 percent share of the Indonesian auto market.