Ruling drafted to safeguard domestic companies
Ruling drafted to safeguard domestic companies
Adianto P. Simamora, The Jakarta Post, Jakarta
The Ministry of Industry and Trade has completed the draft of
a governmental regulation which aims to safeguard local
manufacturers against competition resulting from an "unexpected"
influx of imports.
Alfons Samosir, the ministry's deputy director for
international trade, said over the weekend that the draft of the
"regulation on safeguard measures" was completed last year and
was submitted to President Megawati Soekarnoputri for approval.
"We hope the draft regulation will be approved and implemented
this year," he told The Jakarta Post.
According to Alfons, the safeguard mechanism is consistent
with the World Trade Organization's (WTO) rulings which allow
member countries to temporarily or permanently raise import
duties to curb a sudden influx of certain imported products to
protect local manufacturers.
"In the increasingly open market, sudden and unexpected
influxes of imported products are likely to happen. One of the
WTO goals is to create a freer market where trade barriers are
gradually cut or phased out," he said.
Almost all WTO members have such a safeguard regulation,
Alfons said, recalling that the Philippines had once applied such
a ruling on Indonesian cement imports.
Under the draft regulation, the government may impose a higher
duty on certain imported products if the imports enter the
country in such a massive and quick way that they may threaten
the survival of local companies.
The higher import duty will first apply for six months and, if
during investigation the government finds that the imports can
seriously injure the local industries, it could stay in place for
four years.
Alfons, who is also the secretary of the team drafting the
regulation, said the ministry was obligated to make the
regulation in view of the difficulties being experienced by local
manufacturers due to the massive imports of products like textile
and electronics from China.
Lee Khan Hyun, general manager of PT Samsung Electronic
Indonesia earlier told The Post that the country's electronic
industry was really concerned with the influx of cheaper
electronics which he suspected were illegally brought into the
local market.
"Fifty percent of the local market has been seized by the
imported products," Lee said.
Indra Ibrahim, executive director of the Association of
Indonesian Textile Producers (API) said the country's textile
industry was now concerned with the influx of textile products
from China and India.
"It has really hurt our share in the local market," he told
The Post.
Indra said he was unaware of the WTO safeguard mechanism or
the ministry's move to draft the safeguard regulation.