WTO to review RI's economic, trade policies

Adianto P. Simamora, The Jakarta Post, Jakarta

Member countries of the World Trade Organization (WTO) are to assess Indonesia's economic and trade policies over the past four years on Friday in Geneva, to see whether or not the policies have violated the WTO ruling, said a top official at the Ministry of Industry and Trade.

The ministry's director general for international cooperation, Pos M. Hutabarat, will lead the Indonesian delegation at the WTO Trade Policy Review Mechanism (TPRM) meeting.

Pos will be accompanied by several officials, including those from the Ministry of Finance, the Ministry of Agriculture, the Investment Coordinating Board (BKPM) and Bank Indonesia.

Pos said that the meeting would also examine the impact of Indonesia's policies on multilateral trade.

During the two-day meeting, all the 145 WTO member countries will provide an assessment of Indonesia's economic and trade policies, based on a report prepared independently by the WTO Secretariat.

Pos said the report followed a survey conducted in February by the WTO Secretariat, which studied all economic and trade policies issued by the government since 1998, shortly after the country plunged into a combined economic and political crisis.

"The meeting is important for us, as we can use the occasion to assure the international community that Indonesia's policies are still in line with the WTO," he said.

Pos said that those policies likely to be questioned at the meeting might include the licensing of textile imports, a ban on mining activities in protected forests, import tariffs on luxury cars, a ban on the import of U.S. chicken drumsticks and the diplomatic ties between Indonesia and Israel.

Article XI of the General Agreement on Tariffs and Trade (GATT) stipulates that no WTO member is allowed to impose any prohibition or restriction on international trade other than duties, taxes or charges, whether they are made effective through quotas, import- or export licensing or other measures.

Minister of Industry and Trade Rini MS Soewandi, however, has issued several protective decrees that limit the import of several commodities, such as textiles, sugar, clove and steel.

On Oct. 30, 2002, Rini issued a decree that allowed only textile producers to import textile products following repeated complaints by local producers over the influx of illegally imported, cheap textiles, mostly from China.

Pos said the decree did not go against the WTO ruling, as Indonesia had notified the WTO textile committee of the decree in May 2003.

"We will fight for the decree, as we want to prevent the sale of illegally imported textiles here, which has created unfair trading and inflicted losses on local textile producers," he said.

Another of the much-criticized policies is a decree issued on Sept. 24, 2002, which drastically reduced the number of sugar importers, from 800 to only four companies.

Analysts have repeatedly warned that such protective policies would only harm the country's reputation among the international community.