As the global trend of trade protectionism becomes more apparent, the government, in cooperation with the private sector, is moving to prop up its defense in facing disputes under the WTO.
The government, via the Trade Ministry, is currently in the process of setting up a team of legal advisors comprising both local and international lawyers to assist local companies battling dumping accusations from importing countries.
Government legal assistance had been minimal in the past, Indonesian Chamber of Commerce and Industry (Kadin) chairman Mohammad S. Hidayat said Tuesday.
“We do things on our own. We send people there and hire expensive lawyers at our own cost instead of using the Trade Ministry’s apparatus,” he said.
The government’s initiative to set up the team was the result of continuing pressure from Kadin, Hidayat said.
“In many cases when local businesses are accused of dumping by competitors overseas it may not be true. The petitioners hire sophisticated lawyers who present data that, when thoroughly analyzed, is often untrue, just to restrict our efforts to be their competitors [in their home country],” he said.
Therefore, the ministry should provide top-notch legal practitioners who have mastered international trade law for local businesses facing dumping allegations, to match the “sophisticated” lawyers representing their overseas rivals, Hidayat said.
For some industries, years of dealing with dumping accusations have made them reluctant to delegate legal defense to third parties such as the “team of lawyers” prepared by the Indonesian government.
Indonesian Textile Association (API) chairman Benny Soetrisno said the government’s legal assistance might not be necessary “because we are the ones who understand the matter, and the government needs only to talk to its counterpart”.
The Trade Ministry had been absent from all legal battles faced by API members, Benny added.
The Indonesian Tire Association (APBI) voiced a similar complaint recently. APBI chairman Azis Pane said the ministry was “clearly ignorant” in its handling of recent dumping accusations made by the Turkish government against Indonesian bicycle and motorcycle tire manufacturers.
The ministry’s ignorance had resulted in punitive tariffs of between 5 and 10 percent on bicycle tires and between 20 and 32 percent on motorcycle tires imported from Indonesia, as of Aug. 1, Aziz said.
“We still exported [bicycle and motorcycle tires to Turkey] in July with the usual import duties, and suddenly there were increases to import duties related to [alleged] dumping as of Aug. 1, and the Indonesian government did not inform us about this immediately,” he said last week.
Dumping is the term applied when a manufacturer exports products to another country at prices below those charged in the country of origin or below its production costs. Anti-dumping is measures to counter dumping practices by imposing (additional) import duties based on requests from local businesses.
Hidayat said the situation was equally complicated when local businesses wanted to sue foreign businesses that had allegedly dumped products in the Indonesian market.
The government should not only set up a team, but a special agency to take care of trade disputes, he said.
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