Japan wants to avoid taking RI to WTO

Japan wants to avoid taking RI to WTO

TOKYO (Reuter): Japan has no plans yet to file a complaint with the World Trade Organization (WTO) over Indonesia's "national car" policy and will continue talks on the issue, a trade ministry official said yesterday.

Indonesia is offering tax and tariff concessions to an Indonesian company, in cooperation with a South Korean firm, that will produce the car, something Japan considers unfair to Japanese companies and in violation of WTO free-trade rules.

The Nihon Keizai Shimbun, a Japanese economic daily, reported in its Wednesday morning edition that Japan had decided to bring the complaint to the WTO as early as July.

"It is not true that we have decided to bring the complaint to the WTO," the trade ministry official said.

"We will continue holding talks with Indonesia as the Indonesian government has been anxious to hold a third round of bilateral talks."

Industry sources in Japan say Japanese makers currently have a 95 percent share of the Indonesian vehicle market through joint- venture assembly and licensing arrangements and view Jakarta's project as a threat to this status.

The two countries held talks on June 6 in Kuala Lumpur on Indonesia's car industry policy and have yet to decide a date for more talks.

Indonesia said last week that the "national car", to be produced by its PT Timor Putra Nasional together with South Korea's Kia Motors Corp, would be assembled in South Korea.

In February, Indonesia gave Timor Putra, a company controlled by President Soeharto's youngest son, Hutomo Mandala Putra, tax and tariff breaks to produce the car.

Japan's trade ministry said on June 7 that taking the issue to the WTO might be one way to resolve the dispute.