Tunky expects Seoul's support in car case

JAKARTA (JP): Minister of Industry and Trade Tunky Ariwibowo said yesterday that he believed South Korea would back Indonesia in an international dispute over its national car policy.

Tunky said the Korean ambassador had recently told him that his government would help Indonesia to settle its automotive dispute with Japan, the United States and the European Union.

In relation to newspaper reports that Seoul planned to formally protest against Indonesia's car policy, Tunky said: "I am really not aware if South Korea would also file a complaint at the World Trade Organization (WTO) against Indonesia's national car policy," he said .

Tunky said the Korean ambassador told him recently that his government was interested in joining Indonesia's bilateral consultations with the three complainants.

According to WTO rules, he said, a third party is allowed to join bilateral consultations. "The ambassador said he would help us. But for sure, I have to check the subject again with the ambassador," he added.

Reports from Tokyo last week quoted a Japanese official as saying that South Korea was backing Tokyo at the WTO and would file a similar complaint against Indonesia's car policy.

Japan, the United States and the European Union lodged complaints in the WTO against Indonesia last month.

The three complainants agreed to participate in bilateral talks on the car conflict with Indonesia before taking the case to WTO's dispute settlement body.

Under the national car policy introduced in February, producers of "national cars" are granted exemption from import duties and luxury taxes that add about 60 percent to the price of cars in Indonesia.

PT Timor Putra Nusantara, controlled by Soeharto's youngest son, Hutomo Mandala Putra, is the only company qualified to produce the so-called national car and to receive the tax break.

The company, which will produce the car in cooperation with South Korea's Kia Motors, is allowed to import the car from Kia until the firm's own production factory becomes operational in 1998. (hen)