Polymer makers battle for tariff increases

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.