RI drags feet on IT pact

Thu, 12 Dec 1996, 00:00 WIB | Source: JP

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.