RI demands "flexibility" with agriculture tariffs
RI demands "flexibility" with agriculture tariffs
Adianto P. Simamora, The Jakarta Post, Jakarta
The government has called for greater "flexibility" on the import
tariff policy on key agriculture products during the recent
informal ministerial World Trade Organization (WTO) meeting in
Japan, a senior official at the Ministry of Trade and Industry
said on Friday.
"We want the flexibility in tariff cuts for four products.
This is our position at the WTO talks," Pos M. Hutabarat,
directorate general of multilateral cooperation at the ministry
told The Jakarta Post.
The four products are rice, sugar, soybean and corn.
Under the proposed flexibility position, Indonesia can still
impose a higher import tariff on the four products, aiming to
help protect domestic agribusiness against more competitively
priced imported agriculture commodities.
"Ibu Rini Soewandi (Minister of Trade and Industry) has stated
this position during the last two informal meetings in Japan and
Australia. We hope other member countries can accept our
proposal," he said.
The informal meeting, held last week, was participated in by
25 trade ministers both from developing and developed countries.
Pos said that the main reason for proposing the flexibility
position was because the four commodities were strategic to the
country both in terms of protecting farmers and ensuring food
security here.
"We still need these four products (to be kept at a higher
price for our consumers) as they are still the main pillars in
rural areas which absorb many workers," he said.
He said that the flexibility proposal had been agreed upon by
the national team at WTO.
The team - formed under a presidential decree - was chaired by
Rini with other ministers and experts, included Mary Pangestu,
Marzuki Usman and Djisman Simanjuntak.
According to the current WTO agreement, Indonesia is allowed
to impose higher import tariffs on the four products.
However, Indonesia has been under pressure from the
International Monetary Fund (IMF) to keep a relatively low import
tariff on the four commodities. The IMF has provided the country
with a multi-billion dollar economic bailout package.
The government currently has an import tariff of only 30
percent on rice, far lower than WTO's bound tariff of 160
percent.
Japan, the sponsor of the recent informal meeting, has import
tariffs of 490 percent.
Indonesia applies import tariffs of only Rp 550 to Rp 700 per
kilogram on sugar, and zero percent on soybeans and corn.
European countries and the U.S., respectively, impose import
tariffs of 240 percent and 150 percent on sugar.
The Indonesia Farmers' Association (HKTI) has repeatedly
called on the government to raise import tariffs on the four key
products to protect the ailing agriculture corporations against
cheaper imported commodities.
According to Pos, agricultural issues were the main topic in
the meeting as each WTO member countries were still divided in
both tariff reduction and slashing of agricultural subsidies.
"Japan refuses to reduce import tariffs on rice while the
European countries want to maintain agricultural subsidies," he
said.
He said that the discussion on agriculture was so far based on
the proposal issued by Stuart Harbinson, known as the Uruguay and
Switzerland formulas.
Under the Uruguay formula, the reduction in import tariffs on
agricultural products would be carried out in stages, while the
Swiss formula applies a sharp tariff reduction.
"Both (the Uruguay and Swiss formulas) were opposed by Japan,
European countries and developing countries including Indonesia,"
Pos said.
To resolve the sharp differences, the delegation of each WTO
member country will start formal talks in Geneva starting on
Monday.
"We will continue fighting for the flexibility proposal," Pos
said.
He said that Indonesia's delegation would be chaired by
Gusmardi Bustami, the Indonesian ambassador for WTO in Geneva.
"Gusmardi will be accompanied by Tagor Napitupulu from the
ministry of agriculture," he said.