RI excludes 26 products from CEPT

RI excludes 26 products from CEPT

JAKARTA (JP): Dozens of agricultural products need protection
prior to the full implementation of the ASEAN Free Trade Area,
Minister of Agriculture Sjarifudin Baharsjah said yesterday.

Sjarifudin said that 26 agricultural commodities are
vulnerable to foreign competition and therefore need to be
excluded from the Common Effective Preferential Tariff (CEPT)
scheme.

"The 26 agricultural commodities are grown mainly by small-
holders, and we will not open the domestic market to imports in
order to protect the interests of the farmers," Sjarifudin said.

The 26 commodities, he added, include rice, sugar, milk and
fruit.

He said ASEAN agriculture ministers would meet between Aug. 21
and 23 in Singapore to further discuss which agricultural
commodities the CEPT tariff reduction scheme would cover.

Under the scheme, ASEAN members are required to reduce tariffs
to a maximum of five percent by January 2003.

However, the Sultan of Brunei, Hassanal Bolkiah, suggested at
the 28th ASEAN Ministerial Meeting in Bandar Seri Begawan early
this week that the ASEAN Free Trade Area (AFTA) be accelerated by
three years to the year 2000.

"Although we have a list of what we call 26 sensitive
agricultural commodities, it doesn't mean that we are not ready
for AFTA... Compared to other ASEAN countries, our list is the
shortest one," Sjarifudin was quoted by Antara as saying.

Outside the 26 commodities, however, the minister acknowledged
that Indonesia has included some other agricultural products in
the CEPT scheme.

The CEPT was kicked off on Jan. 1, last year, and has two
programs for reducing tariffs, the so-called "normal track" and
"fast track" programs.

Most items are on the normal track, and only a few are in the
fast track, including cement, fertilizer, pulp, textiles, jewelry
and precious stones, furniture from wood and rattan, leather
goods, plastics, pharmaceuticals, electronics, chemicals, rubber
products, vegetable oil, ceramics and glass, as well as copper
cathode.

The government and businesses have had mixed reactions to the
proposal to accelerate AFTA.

Minister of Trade Satrio B. Joedono expressed his optimism on
Indonesia's readiness for the acceleration of AFTA. Meanwhile,
Minister of Industry Tunky Ariwibowo took a more cautious view,
saying that Indonesia has a very different industrial structure
than Brunei.

Coordinating Minister for Industry and Trade Hartarto noted
that, comparing Indonesia's trade balance with other ASEAN
countries, Indonesia is actually ready to accept the acceleration
of AFTA.

Indonesia's trade balance with ASEAN countries recorded a
surplus of US$2.47 billion last year, with exports valued at $5.2
billion and imports at $2.73 billion.

Sudwikatmono, a senior executive at the powerful Salim Group,
said big companies would be ready whenever Indonesia accepted an
accelerated AFTA.

"We should not worry about the idea of free trade in ASEAN. We
have prepared ourselves to enter the ASEAN market," Sudwikatmono
told journalists at Cikarang in Bekasi, West Java.

Economist Rizal Ramli, from the Econit research institute,
noted yesterday that the acceleration of AFTA is good for
Indonesia in the long run. "However, in the short term, Indonesia
has to bear the economic adjustment costs if it accepts AFTA
ahead of the original schedule."

He suggested that the government increase the number of
Indonesian products in the CEPT's fast-track program rather than
accepting the implementation of AFTA in 2000.(rid)