Topics handled by WTO committees and agreements
Issues covered by the WTO’s committees and agreements

TRADE POLICY REVIEW: INDONESIA
28 and 30 June 2003

Concluding remarks by the Chairperson

175pxls.gif (835 bytes)
See also:
Press release: Reforms must continue to achieve growth and attract investment


We have had a very productive discussion of the trade policies and practices of Indonesia. We owe this to the full and forthright engagement of the Indonesian delegation, led by Mr. Pos Hutabarat, Director General for International Trade and Industry Cooperation, to our discussant, Ambassador Weerasinghe, and to Members' keen interest in Indonesia's policies.

 Members praised Indonesia's efforts to undertake macroeconomic, trade and structural reforms in the wake of the 1997 crisis. As a consequence of these reforms, particularly fiscal consolidation, the economy seems to have stabilized. Members sought clarification of the impact of the rapid moves to decentralize government and enhance regional autonomy on trade and investment. They also noted the difficult external and internal circumstances facing the Indonesian authorities, expressing particular concern over recent trends in investment. The need for progress in regulatory, enforcement, institutional and transparency matters was stressed.

Indonesia's active participation in the WTO and commitment to multilateralism was acknowledged.

Members noted that as a result of unilateral liberalization, Indonesia's tariff had declined to an average of 7.2% in 2002. Several Members also raised questions about, the large gap between bound and applied rates. They also noted that policy in certain sensitive areas was formulated on an ad hoc basis. Some Members sought clarification on the use “check” prices for customs valuation purposes and the use of import restrictive licensing and anti-dumping measures. Questions were asked on Indonesia's strengthening of its legislation on intellectual property rights legislation and enforcement of these rights. Members noted policy developments in agriculture and forestry.

On sectoral issues, with regard to manufacturing, Members noted the persistence of tariff peaks and NTBs on sensitive products, such as textiles and steel. On services, Members praised the extent of unilateral liberalization and sought clarification of market-access conditions for certain activities; in some services sectors, reforms went beyond Indonesia's WTO obligations.

Members also sought clarification on several more specific issues including:

  • the status of approval of the new law on and other revival plans for foreign investment;

  • participation in regional and bilateral trade liberalization agreements;

  • several tariff policy matters, notably customs valuation and bound tariffs;

  • WTO notification of import licensing procedures, state trading practices and labelling requirements;

  • standards formulation and conformity assessment;

  • genetically modified organisms and labelling requirements;

  • government procurement objectives and practices;

  • export restrictions, promotion and finance;

  • legislation on patents, copyright, trade marks, geographical indications and protection of undisclosed information; piracy rate and enforcement;

  • national treatment, GATS commitments and developments in the financial services;

  • deregulation/liberalization plans in telecommunications;

  • policy developments in the tourism sector.

Members expressed their appreciation for the oral and written responses provided by the delegation of Indonesia and looked forward to responses to outstanding questions.

In conclusion, it is my strong sense that we all highly appreciate Indonesia's stance and active participation in moving the WTO's agenda forward. It is clear from Indonesia's experience that the full benefits of reform require sustained efforts, a long period of adjustment, and the support of the multilateral system — particularly through liberal market access. In this context, it is hoped that Indonesia will take advantage of the opportunities presented by the DDA. On the one hand, Indonesia can take into account the concerns expressed by Members during this Review; at the same time, it can bring to Members' attention, the importance of their responding to Indonesia's developmental needs in these negotiations.