RI drags feet on IT pact

By Riyadi

SINGAPORE (JP): Indonesia supports the U.S.-initiated Information Technology Agreement (ITA) but is not prepared to sign it this week, Minister of Industry and Trade Tunky Ariwibowo said here yesterday.

Tunky said Indonesia also supported proposals that the World Trade Organization (WTO) or any other institution study new issues, particularly on an investment treaty, competition policy, government procurements and antidumping.

During a press conference at the WTO ministerial conference, Tunky predicted the ITA would not be signed here this week, but in Geneva after all countries felt comfortable with it.

"The signing of the agreement is something that nobody expects to take place in Singapore. What we are trying to do is get a common understanding on the United States' initiative on ITA and the proper wording of the declaration," Tunky said.

Tunky met acting U.S. Trade Representative Charlene Barshefsky yesterday to discuss mostly bilateral issues. They also talked about the ITA.

They exchanged views on Indonesia's car policy, which the U.S., Japan and the European Union have taken to the WTO's dispute settlement body: But no progress has been made.

Tunky said Indonesia had no problem with the ITA, which had a product coverage in line with Indonesia's tariff reduction schedule, except on about 25 percent of the tariff lines for information technology products.

"So, we just need more time to cut the tariffs on the 25 percent of our information technology products down to zero percent," Tunky said. The products concerned are mostly downstream electronics.

The information technology industry is considered to be the fastest growing industry in the world with exports worth more than US$595 billion for 1995.

The leading exporters of information technology products are Japan which exported $106 billion worth in 1995, United States $97.99 billion, European Union $57.07 billion, Singapore $41.27 billion, South Korea $33.22 billion, Malaysia $32.84 billion, Taiwan $28.71 billion and China $14.5 billion.

Leading importers of information technology include the United States which imported $139.93 billion worth in 1995, European Union $104.84 billion, Japan $37.68 billion, Singapore $24.72 billion, Malaysia $22.22 billion, Canada $19.81 billion and Taiwan $16.53 billion.

The United States, suffering large information-technology trade deficits, has insisted the WTO must reach an ITA agreement this week.

Conference sources said the United States, the European Union, Japan and Canada had been working on a draft framework for ITA which would scrap tariffs on information technology products by the year 2000.

European Commission spokesman Peter Guildford said there was no agreement on ITA although some common ground had been identified.

An Indonesian negotiator said the United States had threatened not to sign the now-debated declaration if delegations from developing countries did not agree with its proposed core labor standards.

Tunky said he and other delegation heads had wanted the Singapore meeting to produce a declaration to guide the direction of the WTO.

He said all countries had agreed upon most of the draft declaration's paragraphs, while other paragraphs needed rephrasing, mostly those on labor standards, investment, competition policy and government procurement.

When asked about labor standards, Tunky said: "I admit it is not an easy subject. And as far as Indonesia is concerned, it is a politically sensitive issue."

On the new issues wrangled at the Singapore meeting, Tunky said Indonesia had joined forces with other countries to support proposals that the WTO or any other institution study them.

"We commit ourselves to the proposed studies on government procurement, investment and competition policy. However, we do not want those studies to prejudice further negotiations at the WTO... Education is one thing, and negotiation is another," Tunky said.

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