Indonesia govt told to be neutral on export restrictions

The government would be better using a diplomatic approach rather than imposing retaliatory measures in response to restrictive trade practices conducted by Indonesia's trading partners, an international trade observer has said.

Niki Bavenda Sari, a researcher with the Trade Ministry's board of trade policy study and development, said recently that restrictive trade measures should not be met by similar restrictive practices, as they could backfire.

"The government needs to be neutral and try to understand the reasons behind the enactment of restrictive measures on local products," she said during the dissemination of a trade-related policy review.

However, the government also needed to negotiate with trading partners imposing restrictive measures on Indonesian products to maintain its export targets.

During the period of April 2014 to July 2015, 10 Indonesian export commodities became subject to antidumping and safeguard measures imposed by a number of countries, according to Trade Ministry data.

Among the products on which restrictive measures were imposed were steel plate, saturated fatty alcohols, hot-rolled steel coils and monosodium glutamate (MSG).

The antidumping measures are carried out by Canada, US, Vietnam, the EU and Australia, while the safeguard measures are carried out by India and Malaysia.

From 2009 to 2013, a number of Indonesian export commodities were subjected to 32 restrictive measures, including antidumping, countervailing and safeguard measures.

During the period, Turkey was the country that imposed the largest number of restrictive measures on Indonesian products with five, followed by the EU (four), India and Pakistan (four each) and Australia with three.

Indonesia has so far imposed safeguard measures on 16 imported products, including coated paper, wire rod and ceramic tableware, according to data from the Indonesian Trade Safeguard Committee of the Trade Ministry.

The relatively high number of restrictive trade measures imposed by many countries has confirmed a previous report by the World Trade Organisation (WTO) that despite moving to free-trade regimes, every country still tried to protect its national interests, according to Niki.

In the period of October 2012 to November 2013, 407 trade restrictions and trade remedies worldwide affected an estimated 1.3 per cent of world imports worth US$250 billion (S$350 billion), WTO's data has shown.

For Indonesia most restrictive trade measures imposed on its products by trading partners did not hugely affect the total export value of non-oil and gas commodities, Niki said.

Trade Ministry data shows that the contribution of products on which restrictive measures were imposed amounted to only around 1 per cent of total non-oil and gas exports.

The data has also revealed that the global export value of the products only slumped by 0.5 per cent, signaling that most exporters have started diversifying their markets.

Meanwhile, Sri Nastiti, the head of the Trade Ministry's centre for international trade co-operation, said that the government still needed to make sure that any restrictive measures imposed on Indonesian products would not unduly harm local businesses.

The Trade Ministry would review the restrictive measures before taking any actions, she went on.