RI seeks WTO rules governing services sector

Zakki P. Hakim, The Jakarta Post/Jakarta

Indonesia along with other developing countries will continue to push for World Trade Organization rules to govern the liberalization of the services sector, particularly as regards the establishment of safeguard mechanisms to control the influx of foreign players in a way that could threaten the local services industry, a senior official at the Ministry of Trade said.

The ministry's director for multilateral cooperation, Djunari Inggih Waskito, said that while talks in the WTO on opening up the services market were very advanced, there had been no significant developments in establishing rules to govern the liberalization process.

"We have been pushing the issue of establishing Emergency Safeguard Measures (ESM) for the last seven years, only to face constant prevarication from the developed world," Djunari told reporters on Thursday.

He said that the safeguard measures were necessary to control imports if a surge in services imports occurred that could threaten or damage the local industry.

The use of safeguard measures is common in the trade of goods, where a country can erect a temporary high tariff wall whenever there is a surge in imports that threaten local industry. This trade defense tool, however, does not exist in the trade of services.

Industrialized countries insist that the use of strict domestic regulation should be sufficient rather than having safeguard measures, Djunari said.

Among the developing world, ASEAN member countries were the front runners in pushing for the use of safeguard measures, he said.

The Association of South East Asian Nations (ASEAN) member countries in the WTO are Brunei, Malaysia, Indonesia, Thailand, the Philippines and Singapore.

Djunari also said that the WTO should push ahead in making rules to govern subsidies and domestic regulations.

"Without multilateral discipline, each member country will establish domestic regulations based on their own standards, which would hampered the liberalization process instead of facilitating it," he said.

A number of WTO member countries have requested Indonesia to open its services sector, including communications, construction, distribution, education, environmental resources, health-related services, financial services, tourism, transport, recreation, and culture and sports.

Djunari said that the government was currently preparing a revised proposal in relation to the liberalization of the services sector.