Rights issue could hurt trade: Mar'ie
Rights issue could hurt trade: Mar'ie
JAKARTA (JP): Minister of Finance Mar'ie Muhammad warned
industrial countries that over-politicizing human rights and
environmental issues could jeopardize the spirit of liberalized
trade and investment.
Speaking at the fourth annual World Economic Development
Conference in Washington on Friday, Mar'ie said that political
threats to the liberalization of international trade and
investment do not come only from those reluctant to remove tariff
and non-tariff barriers.
"We need also to closely monitor the non-technical barriers
which are closely linked to politics, cultural values and social
welfare considerations," he said in his speech, a copy of which
was made available to The Jakarta Post on Saturday.
He acknowledged that in the last couple of years, both
government officials and the private sector in Indonesia
expressed displeasure with what they see as non-tariff trade and
investment barriers imposed by a number of developed countries.
The linking of human rights issues, environmental concerns and
the condition of workers in Indonesia to trade and the provision
of assistance have occasionally dampened bilateral relations with
countries such as the Netherlands and the United States.
Mar'ie said it was necessary to consider the cultural context
of each society or nation before urging for the implementation of
non-technical barriers. Human capital and human capital
endowment, he went on to say, are basically an essential part of
the development process of a nation, its personal growth and its
welfare.
Inefficiency
Mar'ie spoke out against protectionism, which, even in the
short term, will create a premium for inefficiencies.
"In the end, any inefficiency will create an additional burden
on the producer and consumer alike. Furthermore, any
protectionist measure will inevitably trigger retaliation from
the other side, which ultimately leads to trade wars," he said.
The government's long-time policy to provide protectionist
measures to a number of industries in Indonesia has been widely
debated as of late.
Instead of improving the nation's economic performance,
critics point out that protected industries have become
inefficient and monopolistic in nature. Observers also fear that
the protected industries will be unprepared to face the
challenges of free trade as scheduled by the World Trade
Organization (WTO).
The WTO, formed in January of this year, stipulates a gradual
cut back on tariffs for certain commodities to a maximum level of
40 percent.
Mar'ie also commented on a number of regional cooperation
agreements. The ASEAN Free Trade Area, the Asia Pacific Economic
Cooperation forum and the European Community should, he said,
seek to liberalize trade among each group without excluding or
discriminating against nations outside the group or region.
"Free trade areas should operate to enhance the implementation
of free trade internationally. In this respect, it is hoped that
regional cooperation can act as an impetus to smoothen, broaden
and deepen international trade," he said.
Mar'ie pointed out that Indonesia has, in the last two
decades, consistently shown its commitment to the goals of global
trade liberalization as stipulated by the WTO.
Economic reforms, in the form of deregulations and de-
bureaucratization, are aimed at making the economy more market-
oriented and at creating a conducive environment for both foreign
and domestic investors.
The reforms are also intended to mobilize private and domestic
savings, boost industrial exports, adopt stringent fiscal
policies and maintain monetary stability. (pwn)