RI asks KL to annul trade barriers on steel pipes

The Jakarta Post, Jakarta

The government said it had demanded that Malaysia revoke non- tariff barriers against Indonesian steel pipes as compensation for Malaysia delaying opening up its automotive market under the ASEAN Free Trade Area (AFTA) agreement this year.

Director for Regional Cooperation at the Ministry of Industry and Trade Budi Darmadi said on Thursday he had met Malaysian officials last week, and that they had appeared responsive to Indonesia's request.

"As a member of AFTA, Indonesia can ask for special compensation from the Malaysian government because of this delay," he told The Jakarta Post, referring to Kuala Lumpur's decision to defer lowering tariffs protecting its automotive market.

Malaysia was allowed to delay opening up its automotive market until 2005. The delay is meant to protect its national car project, Proton, from an influx of imported cars once trade barriers fall.

Under the AFTA agreement, which came into effect this year, import tariffs on almost all goods traded among ASEAN members must be lowered to between five and zero percent.

Indonesia and Malaysia are among the six original members of the Association of Southeast Asian Nations (ASEAN), to which AFTA applies.

Malaysia, however, slapped non-import tariff barriers on Indonesian steel pipe products, which Budi said was hurting steel producers here.

The government earlier said that at least three of the ASEAN member countries -- Thailand, Malaysia and the Philippines -- were actively imposing non-tariff barriers on a number of Indonesian products.

Thailand had imposed dumping duties on Indonesian float glass products; while the Philippines had imposed safeguard duties on cement products.

Budi added that he had also met several Malaysian businessmen to persuade them to buy Indonesian automotive spare parts.

"They have expressed interest, but want only Indonesian products of consistent quality," he said.