INDONESIA ‒ IMPORT RESTRICTION ON CARPETS AND OTHER TEXTILES

REPLIES BY INDONESIA TO THE QUESTIONS FROM JAPAN[1]

The following communication, dated and received on 25 February 2025, is being circulated at the request of the delegation of Indonesia.

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In October 2019, the Regulation of the Ministry of Trade 77/2019 introduced an import registration/approval system for textile products, substantially banning imports for sales to consumers. As a result, the world's export volume of textile products to Indonesia in 2020 has decreased significantly to about one tenth in comparison with the volume in 2019. Japan is concerned about the consistency of this system with the national treatment stipulated in Article 3 of the GATT, the general elimination of quantitative restrictions stipulated in Article 11 of the GATT, and the national treatment and quantitative restrictions stipulated in Article 2 of the TRIMS Agreement, therefore submits the questions as follow.

Question 1

Due to the import regulation of Indonesian Government introduced in December 2019 (Trade RI no.77 2019), the import of the subject products into Indonesia plunged to 8.6 million dollars in 2020, which is only 1/10 of 2020 imports (83 million dollars). Is it correct that neither the KPPI nor the Ministry of Trade analyzed or mentioned this point, in light of the prerequisites to impose a safeguard such as "increase in imports", "serious injury" and "causal link".

Reply:

The Investigating Authority / KPPI has conducted all investigation procedures including an analysis of evidence of serious injury or threat of serious injury caused by increased imports in 2017, 2018, and 2019 as a basis for issuing Safeguard Measures for Carpets and Other Textile Floor Coverings (_G/SG/N/8/IDN/27). The Regulation of the Minister of Trade 77/2019, which has been revoked, is purely an import regulation which has no relation to either investment or safeguard measures.

Question 2

The safeguard duty rate of Rp 85,679/m2 in the first year is extremely high (which amounts for approximately 150% to 200% ad valorem (per export price)). There is no description about the reason in the notification under article 12.1(B) (_G/SG/N/8/IDN/27). Is it correct to understand that neither the KPPI nor the Ministry of Trade analyzed and confirmed its consistency with the requirement of "to the extent … necessary" (Article 19.1(a) of GATT)?

Reply:

The Investigating Authority / KPPI has conducted investigation procedures objectively and according to the WTO provisions. Indonesia views that the questions related with the Safeguard Measures for Carpets and Other Textile Floor Coverings (_G/SG/N/8/IDN/27) are more suitable to be addressed in the Committee on Safeguard.

Question 3

We understand that the Indonesian government has imposed strengthened licensing requirements on imports of textile products under MOT Regulation No. 77/2019 amending MOT Regulation 85/2015, promulgated on 23 October 2019. We are concerned that, since the 2019 amendment, the import of carpet products (falling under HS57) has experienced a particularly significant decrease compared to the import of other textile products. Please let us know if there is any additional requirement or practical burden under the said licensing requirements or related import regulations applicable specifically to the import of carpet products (HS57).

Reply:

Import Licensing applications are now processed in a simplified manner using electronic systems. Once the documentation is complete and correct, import licenses are issued without delay. Therefore, Indonesia underscores that there is no restriction on importing carpets and other textile products. Moreover, the Regulation of the Minister of Trade 77/2019, which was revoked in 2021, was purely an import regulation and had no relation with investment and safeguard measures. Indonesia views that the questions related with import regulations are more suitable to be covered in the Committee on Import Licensing.

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