I

ndonesia may drag Australia into a "formal" battle at the World Trade Organization (WTO) over the latter's dumping allegations against Indonesian toilet paper.

The Trade Ministry's director general for international trade cooperation Gusmardi Bustami said Sunday Indonesia had warned Australia to terminate the latter's punitive tariffs against Indonesian toilet paper in a recent meeting between the Indonesian ambassador to the WTO and his Australian counterpart.

"Indonesia had an informal bilateral consultation with the Australian ambassador in Geneva, Switzerland, last week, insisting Australia immediately revoke punitive anti-dumping duties on Indonesian *toilet* paper," he told The Jakarta Post from Thailand.

Anti-dumping duties are measures to counter dumping by imposing additional import tariffs. Dumping is said to occur when a manufacturer exports his products to another country at prices below those charged in his home market or even below his production cost.

Gusmardi said Australia was reviewing the case and hoped Indonesia would wait until December for the outcome.

"We are yet to bring this case formally to the WTO's Dispute Settlement Body *DSB*. We'll wait for the development of the case until December," he said.

The ministry's director for trade security Ernawati said the Australian Trade Measures Review Organization had told the Australian government to review the case "because there are weaknesses in their study."

She said it would be an embarrassment to Australia if Indonesia finally brought the case to a formal forum in the WTO.

The Australian Customs Service has imposed additional antidumping duties of 8 percent and 40 percent above the existing five percent tariff on tissue paper products since early this year after it found last December that China was dumping these products in Australia.

Following this, Australian paper distributor Paper Force, along with suppliers PT Pindo Deli and Gold Hong Ye, said they may appeal against the Customs Service.

Paper Force spokesman Steve Nicholson said the Australian Customs carried out a flawed process when they decided upon the additional anti dumping duties, www.proprint.com.au reported on Jan. 14.

Pindo Deli and Gold Hong Ye - two paper mills which are managed by Asia Pulp & Paper (APP) in Indonesia and China respectively - are among tissue paper suppliers accused by Australian Customs of dumping, in addition to PT Lontar Papyrus and PT Univenus.

Pindo Deli, Lontar Papyrus and Univenus are subsidiaries of Indonesia's vastly diversified business empire Sinar Mas Group.

The products in question are primarily for the Select brand of tissue products, for which the Australian paper distributor won the tender in August 2006, with the supply contract expiring in August 2008.

Sinar Mas Group executive director Gandhi Sulistianto said he and government officials had met the Australian trade minister and Prime Minister Kevin Rudd on the case, which he said was "made up" to protect Australian domestic producers.

"If *Australia* cannot be firm to remove *the anti-dumping duties*, we will bring this case formally to the WTO's court," he told the Post.

However, he claimed "he does not remember" the value for his company's toilet paper exports to Australia, nor his share of the Australian market.