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Jakarta Post

RI needs stronger trade-remedy measures

As international trade intensifies, trading nations engage in many more disputes, so Indonesia needs to strengthen its trade-remedy capacity, former deputy trade minister Bayu Krisnamurthi has said

The Jakarta Post
Wed, October 22, 2014

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RI needs stronger trade-remedy measures

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s international trade intensifies, trading nations engage in many more disputes, so Indonesia needs to strengthen its trade-remedy capacity, former deputy trade minister Bayu Krisnamurthi has said.

'€œNations around the globe have become increasingly active in applying antidumping and countervailing measures that trigger disputes. Indonesia may do the same and this will require enhanced institutional capacity,'€ Bayu said recently, giving notes for the incoming administration under the leadership of President Joko '€œJokowi'€ Widodo, which is to be announced this week.

Indonesia has been among the top-10 targets of antidumping investigations '€” the trade defense instrument employed most by developing countries on suspiciously low-priced imports '€” and the top- five targets of countervailing or anti-subsidy duty initiations by fellow members of the World Trade Organization (WTO).

However, the country has yet to be included among the leading users of both instruments. Rather, Indonesia is one of the most active users of safeguarding measures '€” which are applied to protect the domestic industry whenever an unusual influx of imports occurs '€” taking second position after India.

To perform more complex and tougher jobs in strengthening the nation'€™s trade-remedy capacity, Indonesia might need an integrated authority under a special directorate general tackling trade-remedy measures with a bigger pool of resources, according to Bayu.

At present, when the country is accused of antidumping, countervailing and safeguarding by other countries, the cases are handled by the trade defense authority under the Trade Ministry'€™s foreign trade directorate general.

Meanwhile, when the country suspects such things are being done by its trading partners, the cases are investigated by the Indonesian Antidumping Committee (KADI) and trade defense committee.

Bayu said countries worldwide would increasingly use trade-remedy measures in tackling trade disputes.

WTO statistics show that around 4,500 antidumping investigations and 335 countervailing initiations had been launched since its establishment in 1995 up to last year. In addition to this, at least 216 safeguarding actions had been reported to the body over the same period.

Economists have said that Indonesia should significantly improve its trade-defense capacity to address robust challenges enabled by trade liberalization and to better employ available instruments under the WTO to guard its domestic industry.

Another priority for the next government will be to enforce stronger consumer protection as consumption contributes largely to the economy, which can be done by revising the outdated 1999 Consumer Protection Law, according to Bayu.

Domestic consumption is the key driver of Southeast Asia'€™s economy, making up more than half of the country'€™s gross domestic product (GDP).

'€œIt'€™s been 15 years since we introduced the law and we were not in this current situation with such a complex trade environment. It'€™s really necessary to review it,'€ Bayu said.

On a preventive front, an important task will be to educate domestic consumers to help them understand their rights and realize that they must protect themselves instead of relying on the authorities.

In the past two years, the Trade Ministry has intensified supervision on circulating goods domestically and filed around 3,600 cases. Of the figure, only a few can be tackled through a complicated and lengthy legal process, thereby pushing consumers to the losing end.

'€” JP/Linda Yulisman

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