Some products still protected at start of AFTA

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.