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Jakarta Post

Steel association backs govt'€™s import duty hike

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Sun, May 17, 2015   /  02:26 pm

Indonesia Iron and Steel Industry Association (IISIA) executive director Hidayat Triseputro has praised the government'€™s plan to increase steel import duties under the Most Favored Nations (MFN) clause, which he says is one of 13 Indonesian steel industry improvement programs that the IISIA and the Office of the Coordinating Economic Minister have agreed to implement.

Hidayat said that among the programs agreed were requirements on the use of domestically manufactured products for construction work funded by both national and local budgets and for the increase of local industrial content in domestic industries.

The agreement also stipulated the mandatory use of the Indonesian national standard (SNI) industrial benchmark for steel products.

Hidayat further said the programs required that steel byproducts were not included in the hazardous and toxic waste (B3) category. They also mandated the implementation of competitive electricity/gas tariffs, import-monitoring activities from the misuse of the harmonized system (HS) code and the non-tariff barrier policy.

Hidayat hoped that the policy package could run alongside the implementation of steel import duty hikes. The policy should also be implemented before construction activities funded by state and local budgets began, he added.

The head of the fiscal policy office at the Finance Ministry, Suahasil Nazara, said the steel import duty hike policy should take effect as it was critical to protecting the domestic steel industry.

'€œThe ministerial regulation on [MFN] steel tariffs has been completed, so this should take effect,'€ he said as quoted by Antara news agency in Jakarta on Sunday.

Suahasil said the government'€™s plan to implement a steel import duty hike had resulted in a consultation meeting between the Industry Ministry and the Finance Ministry'€™s fiscal policy office, responding to the influx of imported steel, which saw domestic steel production decline to between 30 and 40 percent.

However, he added that the policy would not automatically abolish imported steel because some countries, which already had a free trade agreement with Indonesia, would continue to export their steel products to Indonesia.

Among the countries not included in the MFN clause are China, Japan and Korea, while MFN countries are India, along with other countries in Latin America and Eastern Europe.

The proportion of steel imports from MFN and non-MFN countries is 50-50, according to the Finance Ministry. (ebf)(+++)

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