RI to file a WTO complaint against RP cement policy

Adianto P. Simamora, The Jakarta Post, Jakarta

Indonesia is expected to file a complaint with the World Trade Organization (WTO) against measures imposed by the Philippines on imported Indonesian cement products.

Hatanto Reksodiputro, the director general of international cooperation at the Ministry of Industry and Trade, said on Tuesday Indonesia could not accept the safeguards imposed by the Philippine government because it had failed to notify the WTO about the measures.

Furthermore, the Philippine government had not followed proper procedures in implementing the measures.

The Philippines has imposed safeguard duties on Indonesian cement products since December 2001 to protect local producers. The measures were passed following a surge in imported Indonesian cement.

The Philippines Cement Producer Association (Philcemcor) claims the Indonesian imports threatened the survival of local producers.

According to data from Philcemcor, cement imports from Indonesia reached 369.473 metric tons in 2000, or about 23.4 percent of the total Philippine market of 1.6 million metric tons

And from January to September 2001, Indonesian imports rose sharply to 944.715 metric tons, or 50 percent of the country's total market of 1.865 million metric tons.

As a result, the Philippine government imposed an additional import duty of about 20.6 pesos (1 US cents) per bag of imported Indonesian cement.

The measure is consistent with WTO rulings which allow member countries to protect local manufacturers by temporarily raising import duties on certain products that experience an unexpected surge in imports.

Before taking such a measure, a country must draft a so-called safeguard ruling, which becomes applicable only after the WTO has been notified.

Indonesia is currently drafting such a ruling, while the Philippines has drafted one but not yet notified the WTO.

The safeguard measure is temporary in nature and has to be revoked once there is no proof that imported products are harming local manufacturers.

Hatanto said the Philippine government had not carried out the safeguard measure according to proper procedures.

"The Philippines must conduct an investigation first and provide the Indonesian government with the opportunity to comment before implementing the safeguard measure," Hatanto said.

Such an investigation would determine whether cement imports had caused serious damage to local manufacturers.

"As a member of ASEAN, the Philippines must also discuss its non-tariff policy at the ASEAN Economic Ministerial meeting," he said.

Indonesia and the Philippines are among the six original members of the Association of Southeast Asian Nations (ASEAN) countries that agreed to implement the ASEAN Free Trade Area (AFTA).

The other four original members are Thailand, Singapore, Malaysia and Brunei.