WTO chief wants early resolution of RI auto dispute

WTO chief wants early resolution of RI auto dispute

MANILA (AFP): World Trade Organization (WTO) director-general
Renato Ruggiero said yesterday he hoped for an early
resolution of an auto complaint lodged before its dispute
settlement mechanism against Indonesia.

Japan, the United States and Europe have held a series of
bilateral talks with Indonesia after lodging a complaint with the
WTO in October in an attempt to get Jakarta to remove measures in
its auto policy which the trio claim are discriminatory and
against multilateral trade rules.

The case involves Jakarta's so-called national car policy
which extends special tax breaks to a car currently being
imported by Indonesia's PT Timor Putra Nasional from South Korea.

"We are for the moment in the phase of consultations" with the
parties involved in the dispute, Ruggiero told a news conference
in Manila after he spoke at a Pacific basin business meeting
here.

"We have to see how those consultations will go."

"One of the best records of the dispute settlement procedure
is that we have solved 25 percent of the disputes before they
really go into the legal side of the procedure," Ruggiero said.

"So we hope this will also be the case for Indonesia."
Indonesian President Soeharto ruled in February 1996 that
producers of the "national car" would be granted exemptions on
import duties and luxury taxes, which add about 60 percent to the
price of other cars in Indonesia.

PT Timor Putra Nasional, controlled by Soeharto's son Hutomo
"Tommy" Mandala Putra, was chosen as the national car supplier
and is required to clear an eventual goal of a local content
exceeding 60 percent by 1999.

The cars are being imported from South Korea pending
completion of PT Timor's own factory.

Liberalization

Ruggiero also sought Asian backing for a proposed agreement to
liberalize trade in financial services by the end of the year.

The trade body has set a July 14 target for receiving
liberalization offers from member countries and the end of the
year for concluding the negotiations.

"It's very important that the countries of this region will
really see these negotiations as a key one for them," the Italian
WTO chief told the news conference.

"The participation of countries of East Asia and Southeast
Asia is important because of (its) relevance, because of the
advantages that the multilateral system has brought to this
region, and the importance of the financial institutions in this
part of the world."

Ruggiero, speaking earlier Tuesday before Pacific basin
business leaders at a regional conference here, said an agreement
in the financial services sector would have the same impact on
Asia as those triggered by WTO accords on the liberalization of
telecommunications and information technology.

"In this sector, as in telecommunications and information
technologies, we are building the foundations of the 21st century
economy," he said.

"Financial services cannot be viewed through the outdated
paradigm of importers and exporters, North and South," he said.

"Developing countries have the greatest need for a competitive
financial infrastructure, both to encourage much-needed
investment and to compete in the globalized financial markets of
the future," he said.

"At the same time, developed economies have a clear interest
in an agreement which will open the fastest growing markets to
one of their fastest growing industries."

Ruggiero said the WTO was organizing several regional seminars
to provide technical assistance for 89 countries "in order to
clarify the issues involved with regard to financial services,
and to prepare these countries for the negotiations in this
area."