National car issue has not reached WTO panel: Tunky

National car issue has not reached WTO panel: Tunky

JAKARTA (JP): Minister of Industry and Trade Tunky Ariwibowo
said that Indonesia's controversial national car policy would not
be discussed by the World Trade Organization's (WTO) dispute
settlement body which will meet today in Geneva.

Tunky said yesterday that, based on reports from Indonesia's
representatives at the WTO's Geneva headquarters, no country had
filed a complaint against the national car policy.

The dispute settlement body meets once a month.

Tunky said that countries with complaints to be heard by the
panel must submit their agendas several weeks before the meeting.

"But after making a thorough inventory, we discovered that not
a single WTO member had referred to the national car policy for
discussions (scheduled today)," he said.

But he admitted that this did not necessarily mean that
countries would stop taking the case to the WTO.

"We are still holding bilateral talks which means that we
still hope the talks will be fruitful," Tunky said.

The United States, Japan and the European Union have
threatened to take the issue of Indonesia's national car policy
to the WTO, saying the policy breached international trade rules.

Last October, Japan, the U.S. and the EU lodged their first
complaints with the WTO, which allows parties 60 days for
consultation to try and settle trade disputes.

That period has lapsed but the three have extended their talks
with Indonesia.

Under the national car policy, the government granted a series
of import duty and luxury tax breaks to a so-called national car
maker provided that the cars' local component content was 20
percent by the end of the first year of production, 40 percent by
the end of the second year and 60 percent by the end of the third
year.

The government granted PT Timor Putra Nasional -- controlled
by President Soeharto's youngest son Hutomo Mandala Putra -- the
sole right to develop the national car.

The program allowed Timor Putra -- in conjunction with its
foreign partner Kia Motors Corp. of South Korea -- to produce
Kia's Sephia sedans under the local brand name "Timor".

Since Timor Putra had no assembly plants, the government later
allowed it to import 45,000 completely assembled sedans from Kia
Motors for its first year of production.

Tunky said yesterday the reason the countries raised
complaints at the WTO was because there were "differences among
us on how to interpret the clauses of the WTO".

"We say that as a developing country, we should be given some
time to line up our regulations for (global free trade) in the
next century. And we will abide by this. But some countries say
we should abide by this right now," he said.

He denied that the United State's decision to postpone its
complaint on the national car policy was compensation for
Indonesia's support for the United States-sponsored Information
Technology Agreement signed last month.

Under the agreement reached during a conference of WTO
ministers in Singapore, several member countries agreed to
liberalize trade on information technology products.

Indonesia -- the only developing country that signed the
agreement -- committed itself to submitting by March its table of
commitments for liberalizing this sector.

Economist Mari Pangestu said the stages in the WTO dispute
settlement process consisted of consultation (60 days);
establishment of an independent panel, issuance of a report and
ruling (six and a half months to one year); adoption of the
panel's report (60 days); compliance within a reasonable period
or appeal (three months); and compliance (within a reasonable
time agreed upon by the disputing parties). (pwn)