Economic Policy

Use of Domestic Products Not Against WTO

VIVAnews - The government policy to obligate use of domestic products  does not violate the World Trade Organization's regulations since Indonesia has never signed the government procurement agreement.

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"Singapore is the only ASEAN nation that participated and one of the thirteen countries that signed the agreement," said Deputy of Industry and Commerce of the Economy Ministry, Edy Putra Irawady, in between the 2009 Working Meeting of the Industry Department in Bumi Karsa Bidakara Hotel Jakarta on Wednesday, Feb. 18.

Irawady said that since Indonesia is not involved in the agreement, it is free to run the domestic protection policy. "Protection can be done in various ways according to WTO's regulation," he said.

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The protection can be done based on halal regulation, environmental issue, costumer protection, or commerce protection such as anti-dumping and safeguarding.

"Moreover, we can raise and lower the import duty until 40 percent," he said Irawady feels that a protection policy is every country's right to protect their domestic products.

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"WTO has their own regulation and it includes protectionism. Even based on balance of payment reason, a country is allowed to do protectionism," said he and adding that every country will prioritize the national importance.

Irawady also explained that the duty policy will be adjusted with domestic needs and liability. "For example wheat. We don't produce wheat, so we need to import it. Then it is proper to lower the duty," said he.

But according to Irawady, polypropylene (PP) and polyetylene (PE)'s duty reduction has not been approved because it is a reinforcement instead of protection. 

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Translated by: Ariyantri E. Tarman

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