WTO acknowledges Indonesia for trade liberalization moves

WTO acknowledges Indonesia for trade liberalization moves

Adianto P. Simamora, The Jakarta Post, Jakarta

The World Trade Organization (WTO) has praised Indonesian
efforts to liberalize its trade policies over the past four
years, saying the move had stabilized its economy.

The WTO, however, urged Indonesia to press on with trade
reforms to help boost economic growth, reduce poverty and attract
foreign investment.

The WTO secretariat, on its website, says that trade
liberalization and other structural reforms undertaken by
Indonesia since the severe financial crisis of 1997 have
successfully stabilized the economy and fostered growth.

"But the economy remains fragile and the recent global
downturn has heavily reduced foreign investment, on which the
economy critically depends," it said in a report released on
Tuesday.

The report said further trade and other structural reforms,
including strengthened governance and institutions, were needed
"to alleviate poverty, to provide the basis for the sustained
growth of the economy and to help boost investor confidence,
something which the country urgently needs."

The WTO assessed Indonesia's economic and trade policies over
the past four years in Geneva on Monday to ensure whether or not
the policies violated the WTO ruling.

During the two-day meeting, the WTO praised Indonesia's move
to bring import tariffs down to an average of 7.2 percent in
2002.

At home, however, criticism on the government's move to
drastically reduce import tariffs, mainly on the four key
agriculture products of rice, sugar, soybean and corn, have been
on the rise.

The government currently imposes import tariffs of Rp 430 per
kilogram on rice, Rp 570 and Rp 700 on sugar and zero percent on
both soybean and corn.

Experts have said the government should impose higher import
tariffs on these commodities to protect local farmers against
cheaper imported products.

The report also discloses that WTO members raised questions
over Indonesia's move to impose non-tariff barriers on several
commodities, such as textiles and steel.

Some WTO members have also sought clarification on, among
other things, the 'check' prices for customs valuation purposes,
the use of import restrictive licensing, anti-dumping measures,
export restriction, labeling requirements and participation in
regional and bilateral trade liberalization agreements.

The WTO also urges greater transparency and public scrutiny of
Indonesia's trade policies especially in sensitive sectors,
"where trade policy seems to be set on an ad hoc basis."