RI seeking solution to car dispute

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)