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Committee on Trade-Related Investment Measures - Indonesia - Newly adopted industry law and trade law - Replies to questions from

INDONESIA – newly adopted industry law and trade law

Replies to Questions from canada[1]

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




We refer to the Canada's questions contained in document G/TRIMS/W/138 dated 13 August 2014, Indonesia hereby wishes to provide the following clarifications:




Article 22 of the Trade Law states that "the promotion of Domestic Product consumption […]  shall be carried out through alignment by way of promotion, introduction or marketing and setting out a requirement to use Domestic Product".


1.       How will Indonesia ensure that these Laws are consistent with the National Treatment obligations of the TRIMS?



The Trade Law and the Industry Law are formulated in the spirit of strengthening the national economy, taking into account the Indonesian commitments to the WTO rules. Furthermore, GATT Art. XVIII clearly stipulates the rights of Members in the early stages of development to pursue development interests to improve the low standads of living.


Obligation to use domestic goods and services will be reserved only for goverment procurement. Indonesia is not party to the Government Procurement Agreement in the WTO.


Canada is also concerned of the potential far-reaching scope of this provision.


2.        Does Indonesia plan to apply this across the Indonesian economy or to limit its application to certain sectors or industries?



The provision applies to all sectors across economy and for all regions in Indonesia.


Canada is also concerned about the scope of the Trade Law as it pertains to import/export restrictions and the control of essential and strategic goods. Canada notes that Article 25 permits the Indonesian government to "control the availability of essential Goods and/or strategic Goods throughout the territory of the Unitary State of the Republic of Indonesia to be in sufficient quantity, excellent quality and affordable price."


3.        Can Indonesia please elaborate on this and the policy rationale behind this?




The Government is responsible to provide and ensure the availability of Basic Goods and Essential Goods in sufficient quantity, affordable price and excellent quality for the sake of public welfare, development, and national security.


4.        In addition, could measures aimed at "controlling" these goods take the form the import and export restrictions?



No, "Controling" means that the Government takes the responsibility and therefore must ensure the availability of Basic Goods and Essential Goods in sufficient quantities and affordable price for the people. Various measures which may be taken by the Government, as and when necessary, to attain this responsibility will take into account the Indonesian commitment to the WTO rules.   


Canada notes that throughout the Trade Law, Indonesia makes reference to "essential and strategic goods". Canada also notes that the description of these goods is due to follow in the Presidential Regulation.


5.        Is Indonesia in a position to provide members of this Committee with possible examples of the goods that would fall under these two categories?



The elucidation of Article 25 of the Trade Law provides definition and examples of the goods that fall under these categories. Basic Goods means goods that are exceptionally needed to serve the livelihood of the public as well as are supporting element of public welfare such as rice, sugar, cooking oil, eggs and milk. Essential Goods means strategic goods which have important role in determining the continuity of national development such as fertilizer, cement as well as oil and gas.


Canada notes that the Trade Law stipulates that many provisions are to be articulated further in a future Presidential Regulation.


6.        Could Indonesia please provide some insight into the timing of this implementation legislation?



According to Article 121 of the Trade Law, Implementing Regulations to this Law; either in the form of Government Regulation, Presidential Regulation, or Ministerial Regulation; shall be completed not exceeding 2 (two) years after the promulgation of the Law. The Law was signed, promulgated and entered into force on 11 March 2014.


7.        To what degree will the business community be consulted with regards to the drafting of the implementing legislation?



All stakeholders including business community will always be engaged in the process of drafting the implementing regulations.


8.        What consultation has occurred already with regards to the Trade Law itself?



Consultation with stakeholders had been regularly conducted before the Trade Law was signed.


9.        Are English versions of these Laws available publicly? (If not), does Indonesia have any plans going forward to make an English copy of these laws publicly available?



Official translation of these Laws is not yet available and still in the drafting process.



[1] G/TRIMS/W/138.