NON TARIFF TRADE BARRIERS ‘MISGUIDED’

Irvan Trisnabudi
Jakarta Globe Monday, februari 22,2010


Analysts and bussiness leaders have criticized the goverment’s attempt to limit the impact of the Asean-china Free Trade Agreement by imposing non-tariff barriers, claiming this approach will be in effective and costly.
The goverment has said it will protect the domestic market from a likely flood of cheap chinese goods by strengthening national quality standars on imported products and requiring imports of certain goods to be shipped trought five designated ports.
But while the trade and industry ministries are appealing for more money to support thesenon tariff barriers, business leaders believe the goverment should focus on helping domestic industry rather than restricting foreign competitors.
“I think it’s better for the goverment to pay more attention to thigs that are keeping our businessess from getting more competitive, such as relatively high interest rate,” said Djiman to secretary general of the Indonesian Employers Association (Apindo).
Ernovian Ismy, secretary general of the Indonesian Textile Association (API), echoed this. “The budget for monitoring the flow of illegal imports allowcated to the Trade Ministry should not be increased because if imports are only allowed in specific entry points, it already decreases monitoring costs. More budget should be allocated for lowering lending interest rates,” Ernovian said.
Juniman an economist at PT Bank International Indonesia argued that without better financing, the non-tariff barriers would not be efective. He sugessted the money would be better spent supporting domestic industry in more direct ways.
“We wouldn’t need these non-tariff barriers if our industries could compete with china’s,” he said. “I doubt the two non-tariff bariers schemes could perform up to their maximum potencial, because it’s hard for the goverment to be able to completely fulfill the additional budget and facilities demanded by both ministries”.
To meet intenational guidelines on product quality, the goverment has been enforcing the Indonesian National Standars (SNI) certification process on certain finished-good imports since 2001.
At the end of last year, it added a number of new products including mineral water, tires, helmet, gas-tank regulators and safety equipment to the list of those that must meet the standars.
The goverment also plans to enforce the rules more stringently to ensure that lower-quality imports are kept out. But according to Agus Tjahyana the Ministry of industry’s secretary general, the goverment needs more invesment from the private sector and help from universities that process laboratory testing facilities if it’s to be able to enforce the standars.
Agus said the current total of 500 labs was insufficient to conduct the requaired testing on more than 2000 different product standars. “for example, to take care of the SNI for all imported helnets coming to Indonesia, we only have one laboratory, located in Bandung,” Agus said.
“We would need at least five more to keep up with the millions and millions of helmets flowing into our country.” Djimanto also said the existing infrastucture was inadequate to ensure that the standars are properly enforced.
“We still see many products in retail markets that fail to meet the required SNI,” hesaid. Subagyo the Trade Ministry’s director general for domestic trade said the Rp 15billion annual budgets for monitoring illegal imports was insufficient. He called for the goverment to double it at the last.