U.S. will urge Indonesia to enter auto trade talks

U.S. will urge Indonesia to enter auto trade talks

WASHINGTON (Kyodo): The United States will soon urge Indonesia to enter auto trade talks, focusing on American concerns over its program to develop its own cars, a top U.S. industry official said.

"Unfortunately, there is concern about the effect the national car program will have on all foreign investors in Indonesia," Andrew Card, president of the American Automobile Manufacturers Association, told the American Chamber of Commerce in Singapore Tuesday.

"We are carefully reviewing this program with the U.S. government, and understand that they plan to begin talks soon with the government of Indonesia concerning auto trade," Card said.

"The right way is to follow more open trade and investment policies in line with the World Trade Organization (WTO). The wrong way is to build walls to keep imports out of your market," Card said in his speech, whose excerpt was released here.

He said he would travel to Indonesia on Wednesday to discuss the issue with industry and government officials there.

In February, Indonesian President Soeharto established a program that offers preferential tax treatment to local automakers under such terms as raising contents of local components.

The Indonesian government has awarded the project to a company which is owned by Soeharto's son and has a tie-up with a South Korean automaker.

Japanese automakers, which hold some 90 percent of the Indonesian market, have also criticized the program. The Japanese government is considering filing a WTO dispute settlement case against the local content plan, which it says is a violation of global trade rules.