Tokyo seeks Timor car confirmation

Tokyo seeks Timor car confirmation

TOKYO (AFP): Japan confirmed yesterday it would complain to the World Trade Organization (WTO) if Indonesia was found to have imported finished cars from South Korea duty free for its "national car" project.

"Our stance has not changed. We are awaiting confirmation from the Indonesian government," said an official at the automobile division of the international trade and industry ministry.

Tsutomu Makino, the vice minister of international trade and industry, said last week that Japan would take "necessary steps under international trade rules" as soon as it confirmed the Indonesian government's stance.

News reports from Jakarta said that the cars, made in South Korea by Kia Motor Corp. for PT Timor Putra Nasional, were delivered to customers yesterday.

Japan, which claims that Indonesia's national car policy of granting certain cars preferential tax and tariff treatment violates international trade rules, has been preparing to file official complaints with the WTO against the "national car" policy.

It has been waiting to confirm that 4,000 vehicles imported from South Korea under the national car program have avoided tariffs and taxes charged on other imported cars.

A ministry official was quoted by the Japan Broadcasting Corp. (NHK) as saying: "There's almost no doubt these cars passed customs without taxes being levied on them."

NHK also quoted a senior official from PT Timor as saying in Jakarta: "The filing of a complaint with the WTO is a matter to be dealt with by governments."

The Timor car was priced at the equivalent of 1.7 million yen (US$15,300), about half the cost of a Japanese car of the same class in Indonesia, NHK said.

Suparto Sujatmo, president of PT Timor, said in Jakarta the first 4,000 units that had arrived from South Korea were being delivered to the dealers.

Delivery began Monday so customers could start receiving the vehicles Tuesday, he was quoted as saying.

Under Jakarta's policy, producers of a so-called national car are granted exemption on import duties and luxury taxes that add about 60 percent to the price of other cars in Indonesia.

PT Timor -- a company controlled by President Soeharto's youngest son Hutomo Mandala Putra -- was chosen as the first national car supplier and is required to clear an eventual goal of a local content ratio exceeding 60 percent.

In a joint venture with Kia Motors, PT Timor is allowed to import the cars from South Korea until its own factory becomes operational in 1998.