Some products still protected at start of AFTA

Adianto P. Simamora, The Jakarta Post, Jakarta

The government said that import tariffs on some chemical and plastic products would remain above five percent next year despite the implementation of the ASEAN Free Trade Area (AFTA).

Director general of regional cooperation at the Ministry of Trade and Industry Budi Darmadi said on Saturday that the import tariffs on these products would be lowered to between zero percent and 5 percent in line with AFTA requirements in 2003.

"The ASEAN (Association of Southeast Asian Nations) ministerial meeting has agreed with the government's proposal to delay imposing a lower tariff on 66 items, particularly on chemical and plastic products," Budi told The Jakarta Post.

He did not provide details on the 66 items.

Leaders of six original ASEAN member countries agreed in 1998 to implement the AFTA scheme by lowering tariffs to between zero percent and 5 percent starting next year, but with some flexibility.

Under this agreement, ASEAN countries are allowed to delay reducing import tariffs for some products until 2003.

Local chemical players earlier asserted that they were not yet ready to compete in the AFTA era due to weak technology capabilities, limited financing abilities and huge debts.

A. Azis Pane, compartment chairman of chemical industry at the Indonesian Chamber of Commerce and Industry (KADIN), urged the government to restructure debts plaguing the industry to help them compete with the foreign players.

Elsewhere, Budi said that the government would continue to reduce import tariffs on some 700 items in the so-called Inclusion List to between zero percent and five percent next year.

A government official earlier said that Indonesia had reduced 90 percent of the tariffs in the Inclusion List to the AFTA- agreed level.

Data from the ASEAN secretariat showed that Indonesia registered about 7,286 tariff lines under the AFTA scheme which consisted of 7,192 items in the Inclusion List.

ASEAN comprises Indonesia, Malaysia, Singapore, Philippines, Thailand, Vietnam, Laos, Cambodia, Brunei Darussalam, and Myanmar.

Budi also said that many local companies were unaware of the certificate of origin or the so-called Form D.

He said that local exporters must obtain the Form D to allow their products to enter the ASEAN market at the low tariff levels.

"It (the certificate) is very important because the low (zero percent to 5 percent) import duty facility can only be enjoyed by filling in the Form D which is issued by authorized officials in the respective ASEAN countries," he said.