KL defends tariff policy on steel

The Jakarta Post, Jakarta

Malaysia's Minister of International Trade and Industry Rafidah Aziz on Wednesday defended her government's policy to impose a 50 percent import duty on imported steel products from Indonesia.

She said the import duty was aimed at protecting Malaysia's steel industry from cheaper imported products.

"This is a protection tariff imposed on all imported steel products, not only from Indonesia," Rafidah said at an investment forum here.

She is on a two-day visit to the country, leading a trade mission comprising 47 companies to explore further trade opportunities between the two countries.

Minister of Trade and Industry Rini M. Soewandi was also at the forum.

Indonesian steel manufacturers have protested against the import duty policy.

Rafidah said its policy to raise import tariffs to 50 percent in April 2002, from the previous 15 percent, was not against the spirit of market liberalization.

"It is not against the spirit of the AFTA and the World Trade Organization (WTO) agreement," Rafidah told the Jakarta Post after the seminar.

She is referring to the ASEAN Free Trade Area (AFTA) agreement under which the import tariff on almost all products traded in the region, including steel products, must be under five percent.

Meanwhile, executive director of the association of pipe producers Heru Sudjatmiko criticized the policy, saying it had seriously hurt Indonesia's steel exports to Malaysia.

Indonesia increased its import tariffs on imported steel products from between 5 percent to 10 percent to between 20 percent and 25 percent last October after in response to Malaysia's imposing tariffs first.