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.