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)