RI mulls inspection of goods from ASEAN

Adianto P. Simamora, The Jakarta Post, Jakarta

The government is considering initiating a random inspection on goods imported from ASEAN countries in a bid to ensure that they meet the local content requirement set under AFTA, according to a senior government official.

"Senior officials from the six Association of Southeast Asian Nations (ASEAN) member countries had discussed this mechanism during a recent meeting in Singapore, but there has been no decision yet," Budi Dharmadi, director for international cooperation at the Ministry of Industry and Trade, told The Jakarta Post on Monday.

AFTA, or the ASEAN Free Trade Area, was adopted early this year by the six founding members of ASEAN. Under the scheme, products traded among the six countries can now enjoy a low import tariff of between zero to five percent, as long as the products are manufactured with at least 40 percent local content.

The six founding countries of ASEAN are Indonesia, Singapore, Malaysia, the Philippines, Brunei Darussalam and Thailand.

Budi said that although there had been no complaints from local industries about unfair trade practice, the random inspection mechanism was necessary as a precautionary measure to anticipate the possibility of countries outside ASEAN trying to take advantage of the AFTA scheme by exporting their products via one of the ASEAN member countries.

The average tariff on trade within ASEAN is now down to 3.2 percent.

Earlier this week, Minister of Industry and Trade Rini MS Soewandi raised concern about the lack of supervisory mechanisms to ensure fair trade within the region.

"We (Indonesia) have cut down the import tariff on almost all products to between zero and five percent, this is very crucial.

"We need to be more careful in examining the local content of products from ASEAN member countries entering this country ," Rini said.

Elsewhere, Budi said that if realized, the physical inspection mechanism on the imported goods would be implemented at the country of origin.

Almost 100 percent of Indonesia's import tariffs in the Inclusion List have been lowered to between 0 percent and 5 percent.

The country registered about 7,286 tariff lines under the AFTA scheme which consisted of 7,192 items in the Inclusion List.

Some local manufacturers had raised concerns that the implementation of AFTA would cause the domestic market to be flooded with cheaper imported products.