RI accuses neighbors of unfair trading

Adianto P. Simamora, The Jakarta Post, Jakarta

On Friday, a mere four days after the implementation of the Association of Southeast Asian Nations (ASEAN) Free Trade Area, popularly known as AFTA, the Indonesian government accused three of its member nations of unfairly blocking the import of a number of Indonesian products.

Budi Darmadi, director of regional cooperation, said that the ASEAN countries - Thailand, Malaysia and the Philippines - had actively imposed various non-tariff barriers to keep some Indonesian products outside their domestic markets.

The three are among the six ASEAN member nations which implemented the AFTA on Jan. 1.

The three other countries are Indonesia, Singapore and Brunei Darussalam.

Budi said the non-tariff barriers, in raising the prices of their products, had effectively forced Indonesian business players to pay extra money to sell their products in the countries' markets.

The Indonesian government has "filed complaints with the respective governments and asked them to revoke these non-tariff barriers," he told The Jakarta Post.

According to Budi, Thailand has imposed dumping duties on Indonesia-made float glass products; the Philippine government, meantime, has levied so-called "safeguard" costs on Indonesian cement products while Malaysia has created complex administrative regulations for Indonesian steel pipe products.

The governments of the three countries have argued that such non-tariff barriers were necessary to keep their local businessmen from bankruptcy, Budi said.

"I think these practices are in conflict with AFTA," he said.

Among the agreements in the economic zone are requirements to lower import tariffs to between zero and five percent.

The four other ASEAN members -- Laos, Myanmar, Cambodia and Vietnam -- are allowed to delay opening up their markets until between the years 2006 and 2010.

Indonesia has managed to reduce 99.08 percent of the 7,192 items with the import tariffs of between 0 percent to 5 percent, as required under AFTA.

The six countries are allowed to delay implementing tariff reduction for some certain products until 2003 under a so-called "flexibility measure."

Indonesia has delayed cutting import tariffs on 66 products, mostly plastic and chemical products, to protect the local plastic and chemical industry. Import tariffs on such products now hover about 10 percent.

Budi said ASEAN has established the so-called Coordinating Committee for CEPT AFTA (CCCA) which is assigned to settle disputes among ASEAN members over the implementation of the AFTA.

"We will not hesitate to bring this problem to the CCCA meeting," Budi said.

The CCCA, which meets at least three times a year, will discuss disputes and find out solutions.

If they fail to solve the problem, the dispute will be brought to a higher settlement agency called the Senior Economic Official Meeting (SEOM).

All the decisions should be approved by the so-called AFTA Council, which comprise ministers in charge of trade affairs in each ASEAN countries. The AFTA Council meets once a year.