No radical measures on trade needed

No radical measures on trade needed

JAKARTA (JP): Indonesia, in implementing the new General
Agreement on Tariffs and Trade (GATT), does not need to take
radical measures on trade protection because most of its import
tariffs are lower than the level required by the agreement.

Halida Melani, secretary of the Directorate General of Foreign
Trade of the Ministry of Trade, said in a discussion here
yesterday that the Final Act on GATT, which was signed by 117
countries in Morocco in April, requires developing countries to
lower their imports tariffs to a maximum of 40 percent.

"Most of our import tariffs have been lower than 40 percent,"
she told the meeting, which was opened by State Minister of
Investment Sanyoto Sastrowardoyo.

However, Halida said that Indonesia will continue its moves to
liberalize its foreign trade by removing protection of its
industries.

The government, since the 1980s, has issued a series of
deregulatory measures lowering tariffs on the imports of hundreds
of products and removing many non-tariff barriers.

She acknowledged that Indonesia still has a problem with its
non-tariff barriers, particularly those related to a requirement
on local contents in imports.

Under a policy introduced recently to encourage automotive
companies to increase the manufacture of components, the
government provides incentives by imposing lower tariffs on
imports of automotive components which will be used for the
assembling of vehicles with a greater portion of local contents.

However, a deputy chairman of the Investment Coordinating
Board (BKPM), David Napitupulu, said that Indonesia, as a
developing country, has five years to adjust to such a policy
because it still needs time to encourage investment for the
improvement of the country's capability in the automotive
industry.

The final act said that GATT recognizes certain investment
measures that restrict and distort trade. "The agreement requires
mandatory notification of all non-conforming TRIMs (Trade Related
Aspects of Investment Measures) and their elimination within two
years for developed countries, five years for developing
countries and within seven years for least-developed countries,"
it said. (yns)