RI ready to face Japan's indictment over car policy

RI ready to face Japan's indictment over car policy

JAKARTA (JP): Indonesia will not change its national car
policy and is ready to face any moves Japan makes toward taking
the issue to the World Trade Organization (WTO), Minister of
Industry and Trade Tunky Ariwibowo said yesterday.

After addressing a seminar here on the promotion of the
utilization of local products Tunky said: "We're ready to discuss
it before the WTO. We'll explain the background of the policy."

Japan's Deputy Minister of Industry and Trade Tsutomu Makino
told a press conference in Tokyo on Monday that Japan will take
Indonesia to the WTO as soon as it can confirm that cars imported
from South Korea have received preferential treatment.

He said the Indonesian policy of giving preferential import
tariffs to South Korea -- due to its support of the national car
policy -- is clearly against WTO principles.

The discrimination will result in the South Korean cars being
cheaper than other cars, including those from Japan, Makino
stressed.

Through the national car policy the Indonesian government is
providing tariff and tax breaks to PT Timor Putra Nasional to
produce 1,500 CC sedans under the local brand name of Timor. The
private company which is cooperating with Kia Motors Corp. of
South Korea is owned by President Soeharto's youngest son Hutomo
(Tommy) Mandala Putra. Because Timor Putra's production
facilities are not yet ready, the company is being allowed to
import cars from Kia without paying import duties and luxury
sales tax for the first year.

"The policy is very important to strengthen our automotive
industry. We want to become a self-reliant country and tap the
potential of our domestic market. That's our reason," Tunky said
yesterday.

According to the minister there are WTO rules that can be
implemented gradually. Indonesia's car policy, therefore, is in
line with the WTO's principles.

He said that Indonesia will hire lawyers if Japan takes the
case to the WTO.

"But actually we have been pursuing a peaceful way of solving
the conflict," he noted.

No panic

Minister/State Secretary Moerdiono said yesterday that
Indonesia will not panic in facing the Japanese threat to take
its car policy to the WTO.

"Indonesia and Japan will continue to consider that their
bilateral relations are paramount despite Japan's intention to go
to the WTO," he told reporters here.

"We have prepared ourselves to face the case. We will hire
local and foreign lawyers to defend our country in the WTO," he
said.

He said that such action is not new. Since the formation of
the WTO last January, 57 trade disputes have been taken to the
international trade organization. Of the 57 cases, only 17 have
been solved.

He said that Japan itself has faced nine indictments from
other countries in the WTO. Other countries, including the United
States, Canada, Australia, India, South Korea, Thailand and the
European Union have also faced such indictments.

According to Moerdiono, when countries try to increase their
exports, trade conflicts tend to arise. "That's why countries
decided to establish the WTO," he said, adding that taking the
case to the WTO could result in a fair solution. (13)

Photo -- Page 10