RI ready for full 'implementation of AFTA in 2002'

RI ready for full 'implementation of AFTA in 2002'

JAKARTA (JP): Indonesia is ready for the full implementation
of the ASEAN Free Trade Area (AFTA) in 2002 whereby tariffs on
imports from within the Association of the Southeast Asian
(ASEAN) member countries should be lowered to between zero
percent to 5 percent, a senior trade official said here on
Wednesday.

Budi Darmadi, a director for regional cooperation at the
Ministry of Industry and Trade, said Indonesia has already
implemented 90 percent of the AFTA scheme.

"For next year, there would only be 66 product items which are
still subject to more than a 5 percent import tariff," he told
journalists on the sidelines of a workshop on AFTA's Common
Effective Preferential Tariff (CEPT) scheme.

Indonesia has been well in line with the timetable set under
AFTA in which at least 85 percent of the products included in the
program should have import duties of 5 percent by the year 2000,
Budi said, adding that by the end of this year, the 5 percent
import tariff should cover at least 90 percent of them.

AFTA itself was established to increase trade between member
countries of the Association of Southeast Asian Nations (ASEAN),
to attract foreign direct investment, and to create a globally
competitive production base in the region.

The director of the Bureau of Trade, Industry, and Services of
the ASEAN Secretariat, Robert R. Teh, said the original deadline
for the implementation of zero percent import duty was 15 years
after its conception in 1993; however, in the ASEAN economic
ministers meeting in December 1998 in Hanoi, Vietnam, the
deadline was accelerated to 2002.

The advanced implementation of AFTA to 2002 would only effect
the six original signatories of ASEAN, which are Brunei,
Indonesia, Malaysia, the Philippines, Singapore, and Thailand, he
said.

The other four countries were to follow, with Vietnam in 2006,
Laos and Myanmar in 2008, and Cambodia in 2010, he said.

Budi said that Indonesia has already imposed import tariffs of
between zero percent to 5 percent on 6,451 items, or 89.72
percent of the 7,190 products included in the AFTA scheme.

However, he said that Indonesia would lobby for the exclusion
of sugar from the program, saying that Indonesian sugar farmers
needed protection to survive.

"We are currently lobbying for sugar to be entered into the
highly sensitive list, which in effect would give longer time for
the implementation of zero percent duty," Budi said.

CEPT for products in the highly sensitive list would only be
implemented gradually after 2003, with the period until 2010 for
full implementation, he added.

Ketut Suarka, senior official of the directorate general, said
that Indonesia has already included rice in the highly sensitive
list, and among other things that are included in the general
exclusion list are alcoholic beverages.

Indonesia was also in negotiation with Malaysia for
compensation due to the exclusion of Malaysia's automobile
industry in the tariff reduction scheme.

"For Malaysian automobile imports to Indonesia, we will impose
import duty of about 80 percent, depending on the engine type and
the condition of the imports," Budi said.

Other negotiations for compensation were still ongoing, he
said, adding that Thailand was also seeking compensation for the
loss of profit, he added.

Calls for delays of the AFTA plan have often been raised by no
less than members of the Indonesian Chamber of Commerce and
Industry (Kadin) and the Association of Indonesian Automotive
Industries (Gaikindo).(tnt)