T

he newly passed Trade Law is not against the free trade principles of the World Trade Organization (WTO), despite it giving more power to the government to control the market and protect local industries, a senior trade official said.

Deputy Trade Minister Bayu Krisnamurthi acknowledged that with the new law, the government would have more control over trade such as by limiting exports and imports. But such practices did not violate global trade rules, he said.

Thus, there would be a slim chance of other countries challenging the law at the WTO '€” as many parties feared, Bayu added.

The House of Representatives passed the country'€™s first-ever integrated trade law on Tuesday, allowing the government to curb exports and imports to help spur growth in local industries and shield the domestic market.

Last month, Indonesia, one of the biggest producers of commodities including palm oil, coal, tin, nickel and bauxite, introduced export bans on unprocessed mineral ores in a bid to increase the added value of the mining industry.

The new law gives the government the power to impose tariff and non-tariff barriers in the trade of certain goods or commodities in order to protect local industries and local markets from the influx of foreign goods.

The law also gives legislators more say in free trade negotiations conducted by the government with the country'€™s trading partners.

Analysts have expressed concerns that the law '€” which provides room for the government to intervene in the market '€” will meet resistance from the country'€™s trading partners.

They also fear such trading partners will challenge the law at the WTO to ensure the free flow of goods from and to Indonesia.

However, domestic business players backed the government'€™s view, saying the protective nature of the law did not go against free trade.

Indonesian Chamber of Commerce and Industry (Kadin) deputy chairman Chris Kanter said giving the government power to control the export and import of certain goods and allowing legislators to give their opinion in free trade deals were common global practices.

'€œThere'€™s no article that breaches WTO rules. Restricting the export or import of certain goods is also commonly done by other countries, especially in developing countries like Indonesia that are members of the WTO,'€ he told The Jakarta Post.

Indonesian Employers'€™ Association (Apindo) deputy chairman Franky Sibarani said the possibility of Indonesia'€™s trading partners challenging the law with the WTO panel would be slim as the law did not oppose free trade.

'€œThe law only reflects the trade arrangements that the government has so far applied, such as the raw mineral export ban. So there'€™s no worries about it,'€ he told the Post.

However, Padjadjaran University economist Titik Anas warned that several articles in the law would largely incur potential protests from trading partners once the implementing regulations were put in place, paving the way for them to take the case to the WTO.

Apart from articles restricting exports, other articles, such as Article 35 that allows the government to ban or limit goods and services trade in the national interest, serve as loopholes for violating WTO rules.

'€œWhen the government really implements the export and import restrictions as well as other measures contrary to its commitment in the WTO, the trading partners will file a complaint at the Dispute Settlement Body,'€ she said.