Polymer makers battle for tariff increases

JAKARTA (CNI): Indonesian polymer producers are battling for an increase in tariffs and a switch to the dual tariff system used by other ASEAN countries.

But Senior industry representatives failed in a recent meeting with Indonesia's Minister of Industry and Trade to persuade the official to support their call for greater trade protection, CNI, a newswire specializing in chemical industries, reported on Friday.

In 1996, Indonesian polymer tariffs stood at 40 percent. They were reduced to 20 percent in 1997 to 15 percent in 1999 and in January of this year were lowered to 10 percent. Under the Asean Free Trade Area (AFTA) agreement, members of ASEAN are committed to lowering import tariffs for all goods to 5 percent by 2003.

Indonesia has yet to announce its schedule for further reducing polymer tariffs.

Budi Susanto, secretary general of the Plastic Raw Material Producers' Association, said that Indonesia's petrochemical industry is much more liberated than its neighbors while its economy is in a far worse state than fellow ASEAN countries such as Thailand and Malaysia. He added that not only are tariffs are higher in those other ASEAN countries, but also a dual tariff system is employed.

"In Thailand, polymers imported from Afta are subject to 15 percent duties, while those from Most Favored Nation (MFN) countries are levied 20 percent tariffs," he said.

Susanto said that in the case of Malaysia, imports from Afta carry 20 percent duties and MFN imports 30 percent. In Indonesia, imports from both Afta and MFN carry the 10 percent duties.

Susanto blamed Indonesia's ''unfair'' tariff policy for what he described as the country's huge volume of imported polymers. However, the sharp depreciation of the rupiah during the last few weeks has made polymer imports much harder to afford for converters.