RI seeking solution to car dispute
JAKARTA (JP): Indonesia would rather seek a bilateral solution with Japan than involve the World Trade Organization (WTO) in the controversy over Indonesia's national car policy.
"It's up to them (Japan) whether they want to bring the issue to the WTO or not. However, I want to stress here that Indonesia prefers solving this problem bilaterally," Minister of Industry and Trade Tunky Ariwibowo said at his office yesterday evening.
Tunky, who visited Japan on April 9 and April 10 to explain the new policy, said that senior industry and trade officials from the two countries will hold meetings to discuss the new automotive policy.
However, he gave no exact date for the planned meetings.
Yesterday morning, Tunky reported to President Soeharto on his recent visit to Japan, where he met Japanese Foreign Minister Yukihiko Ikeda and Minister of International Trade and Industry Shunpei Tsukahara.
Tunky said the two Japanese ministers are concerned that several points of the new policy are against WTO regulations.
"I told them that we had studied and taken into consideration WTO rules before issuing the new automotive policy," Tunky said.
The government announced in February that it was scrapping import duties on components and luxury sales taxes for local car makers able to meet local-content requirements and other conditions.
It announced later that PT Timor Putra Nasional, controlled by President Soeharto's youngest son Hutomo Mandala Putra, would be the only company to receive the tax and tariff breaks.
On the new policy, Japanese Ambassador to Indonesia Taizo Watanabe said recently that his government does not oppose Indonesian's national car policy, but objects to the way it is being implemented. He argued that the policy does not conform to standards of transparency, equity or fairness.
Tunky said yesterday that Japan has asked Indonesia to ensure that the new policy does not harm the existing car companies here, many of which are allied with Japanese auto firms.
Japanese vehicles dominate Indonesia's automotive market with a share of more than 90 percent.
Similar concern
Tunky said the United States, which also has automotive interests in Indonesia, has expressed similar concern with the new policy. "We have answered their questions, which are similar to Japan's."
He said he has told Japan and the United States that the new policy is aimed at making Indonesia's automotive industry more independent.
Indonesia has long suffered a lopsided trade balance in the automotive sector. Imports of automotive products hit US$3.6 billion last year, or about 10 percent of the country's total non-oil imports. Meanwhile, exports of automotive products were less than $250 million.
"They understand the background and the objectives of our national car program. And we (Indonesia and Japan) have agreed to hold further talks to register the effects of the policy and find the possible solutions," Tunky said.
In the planned meetings, he said Indonesia will consider all options, including new incentives for existing car assemblers, to solve any problems that may arise.
PT Toyota Astra Motor, a joint venture between PT Astra International of Indonesia and Toyota Motors of Japan, has proposed that the government extend new incentives to the existing car firms, especially those which produce commercial vehicles.
"We are open to all possible options to solve the problems as long as they do not disrupt our national car program," Tunky said. (rid)