Committee on Trade-Related Investment Measures - Indonesia - Certain measures addressing local content in investment in the telecommunications sector - Replies to questions from Japan

INDONESIA – certain measures addressing local content

in investment in the telecommunications sector

Replies to Questions from Japan[1]

The following communication, dated 15 April 2015, is being circulated at the request of the Delegation of Indonesia.

 

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We refer to Japan's questions contained in document G/TRIMS/W/154 dated 13 April 2015, Indonesia hereby wishes to provide the following clarifications:

 

Question 1

 

Article II of TRIMS Agreement draws the provision of Article III of GATT, and paragraph 4 of Article III of GATT stipulates that the products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin. In our view, all of the above-mentioned measures seem to be inconsistent with paragraph 4 of Article III of GATT and Article II of TRIMS Agreement. Does Indonesia consider these measures to be consistent with the agreements? If so, please explain the reason.

 

Reply

 

Indonesia reiterates its previous response in document G/TRIMS/W/75 that Decree No. 7/2009 is already in line with all WTO provisions, especially GATT Article III.8(a). Indonesia would also like to confirm that the Decree does not differentiate treatment between local and foreign-service providers so it is consistent with Article 2 of TRIMs Agreement.

 

Question 2

 

In addition, according to the provisions of 1 (a) of the Annex of the TRIMS Agreement, TRIMs that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of GATT include the measures which require the purchase or use by an enterprise of products of domestic origin or from any domestic source. Therefore, in our view, those above-mentioned measures are inconsistent with paragraph 4 of Article III of GATT and TRIMS Agreement. Does Indonesia consider that those local requirements measures are consistent with paragraph 4 of Article III of GATT and TRIMS Agreement? If so, please explain the reason.

 

Reply

 

The regulation is intended to develop telecommunication sector in remote and under-served/unserved areas, as well as rural areas which require government assistance. Therefore, Indonesia perceives that this program falls under government procurement activities which is regulated under Article III.8(a) of GATT 1994. As such, the enactment of this regulation does not violate the national treatment principle as stipulated in Article III.4 of GATT 1994 and TRIMs Agreement.

 

Question 3

 

With regard to Decree 41/PER/M.KOMINFO/10/2009, which stipulates the calculation method of the TKDN, it does not clearly define suppliers and products to which the TKDN is applied. In accordance with Article VI of the TRIMS Agreement which stipulates transparency, could Indonesia explain what TKDN is imposed and to which types of telecommunications operators?

 

Reply

 

Please refer to our response in number 2.

 

Question 4

 

Are there any revision or additional regulations to those measures? If any, please provide English translations.

 

Reply

 

So far, there is no revision or additional regulation to the measures in question.

 

 

 

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[1] G/TRIMS/W/154.