RI delays liberalization of auto sector under ASEAN plan

Zakki P. Hakim, The Jakarta Post/Jakarta

The government is determined in protecting the country's automotive industry from competition with automotive players from neighboring countries until 2010, despite the Association of Southeast Asian Nations (ASEAN) plan to open up the sector within the next two years.

According to a document obtained by The Jakarta Post, automotive components dominated the country's temporary exclusion list from ASEAN's plan to liberalize 11 "priority sectors" including automotive by 2007.

Director General of Trade for international cooperation Pos M. Hutabarat confirmed this.

"The automotive sector dominates the (negative) list by nearly 80 percent, or 78.8 percent to be precise," he told the Post recently.

The inclusion of certain goods on the negative list was based on the request of local industry players.

ASEAN members have agreed to liberalize the 11 sectors by 2007 for the regional grouping's six founding member countries, and 2012 for the newer members in a bid to boost trade and investment within the region.

The 11 sectors are agro-based products, automotive, e-ASEAN, electronics, fisheries, healthcare, rubber-based products, textiles and apparel, tourism, wood-based products and air travel.

ASEAN leaders are slated to strengthen this liberalization commitment at a summit in Vientianne, Laos, later in November.

But under the liberalization plan, each country has a quota to exclude no more than 641 groups of goods, or 15 percent of the total tariff categories in the 11 priority sectors. This temporary exclusion will expire in 2010.

There are a total of 4,273 tariff categories traded in the 11 priority sectors. The tariff groupings are based on the eight digit tariff categories of the ASEAN Harmonized Tariff Nomenclature (AHTN).

The ministry's director for regional cooperation, Eliver Radjagoekgoek said that the proposed negative list had been submitted to the ASEAN Secretariat on Monday.

ASEAN founding members are Brunei, Malaysia, Indonesia, the Philippines, Singapore and Thailand, while Cambodia, Laos, Myanmar and Vietnam joined later.

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RI's "negative list" in 11 priority sectors

Sectors Negative List

Tariff Posts

Electronics 38 Fisheries 6 Agro-based 18 Healthcare 5 Rubber-based 58 Textiles and Apparels 11 Automotive 505

Total 641

Note: Sectors on nonnegative list not included in the table

Source: Ministry of Trade