RI wood exports to lose GSP

JAKARTA (JP): Indonesia's representative office in the European Union has announced that beginning in 1998 Indonesia's footwear and wood product exports to Europe will no longer enjoy privileges from the General System of Preferences (GSP).

Adrianus Mooy, Indonesia's ambassador to the union, said over the weekend that the decision on the GSP cessation is in line with the latest string of GSP regulations passed early last week by the common market.

The essence of the new GSP regulations lies in the concept of "graduation" which stipulates that trade privileges must be gradually reduced as the economic growth of the GSP recipients increases above certain levels, Mooy said.

On Saturday he also said that beginning in 1998 the new union rules regulate that all countries with an annual income per capita of less than US$6,000 will loose all GSP privileges for specific products, Antara reported.

For Indonesia, those products include wood-based products and footwear, which are major foreign currency earners of the country. However, these items will still receive the full GSP privilege next year.

Minister of Industry Tunky Ariwibowo recently announced that plywood exports dropped by 0.80 percent to $3.78 billion in the January-August period of this year from the corresponding period in 1993.

Official data shows that Indonesia's footwear exports during the January-July period of this year reached $1.06 billion. By comparison, footwear exports for the entire year of 1993 reached $1.66 billion.

Mooy also said that in the new union rules all decisions related to labor matters must be taken after consultations with the relevant forums, such as the International Labor Organization, the World Trade Organization and the Organization for Economic Cooperation and Development.

"This is not so bad since the original draft of the new rules does not say that consultations with those organizations are required," said Mooy, a former governor of Bank Indonesia, the central bank. (hdj)