World Trade Organization ratified

World Trade Organization ratified

JAKARTA (JP): The House of Representatives (DPR) yesterday
approved a law ratifying the establishment of the World Trade
Organization (WTO), which will administer the new General
Agreement on Tariffs and Trade (GATT) early next year.

In a plenary session led by Soetedjo of the Armed Forces
(ABRI) faction, the House unanimously passed the WTO law, along
with another law on an extradition agreement between Indonesia
and Australia.

None of the House's four factions -- ABRI, the ruling Golkar,
the United Development Party (PPP) and the Indonesian Democratic
Party (PDI) -- voiced reservations to ratifying the WTO.

The bill on the WTO was submitted by the government to the
House on Sept. 3 by Minister of Trade Satrio Budiardjo Joedono.
On Sept. 30, the House's Commission I, which deals with laws and
foreign affairs, formed a special team to deliberate the bill.

The special team effectively deliberated the bill from Oct. 1
to 8, and submitted the results to the commission on Oct. 10. The
final draft of the WTO bill was then brought to yesterday's
plenary session for ratification.

In yesterday's session, Minister Joedono explained to the
House the benefits that Indonesia would reap from ratifying the
WTO. The average tariffs on Indonesia's products exported to
Japan, for instance, will fall to 4.4 percent, to the United
States and the European Union to around six percent.

These three economies are the major destinations of
Indonesia's exports.

Chances

"Many Indonesian products have great chances of entering these
three major markets duty free," he said. "Three quarters of
Indonesia's exports to Japan and nearly half its exports to the
European Union and the United States, for example, will no longer
be subject to duties."

However, those three major markets, as well as other potential
markets, will be open not only for Indonesian products but also
for the products of other GATT signatories, thereby increasing
competition.

Dwie Riawenny Nasution of the Golkar faction, therefore,
suggested that the government take necessary actions to make
Indonesian products more competitive on the world market.

The new GATT was signed by some 125 countries in Marrakesh,
Morocco, last April 15 after more than seven years of tough
negotiations on freer trade of goods and services.

When asked about a study by the World Bank and the
Organization of Economic Cooperation and Development (OECD) that
projects Indonesia to be a big loser in the agricultural sector
after the implementation of the new GATT, Joedono called the
study out of date and unrealistic.

"The study assumes that Indonesia will be a great rice
exporter when trade of this commodity is totally liberated in
year 2005. Now you see, the projection of losses from rice
exports is simply unrealistic as Indonesia is not a net rice
exporter at all," Joedono told The Jakarta Post.

The minister said Indonesia, as a developing country, is safe
enough in the agriculture sector because import tariffs for 300
commodities of agricultural products are set at above its average
ceiling of 40 percent.

A duty of 90 percent will be imposed on the first 70,000 tons
of imported rice and 180 percent on imports above that, he
said.(rid)

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