The Philippines Irritated The Trade Minister Lutfi Because Interferes With Car Exports From Indonesia

Minister of Trade, M. Lutfi. (Photo: Doc. Of the Ministry of Trade)

JAKARTA - The Minister of Trade Muhammad Lutfi admits that he is annoyed because he feels that he is being tricked by other countries. One of them is the Philippines. The country decided to impose a temporary security measure (BMTPS) or safeguard duty for cars from Indonesia.

"As soon as we transformed into industrial exporters and our high-tech industries were also bullied, we were harassed. For example, I am upset, we are selling approximately 1.5 billion US dollars of our cars to the Philippines. Now the Philippines is now setting safeguards for the industry them in the Philippines from our cars", he said, at the 'Economy Recovery: How to Accelerate Economic Growth' event, Wednesday, January 27th.

According to Lutfi, the Philippines actually has another goal of imposing safeguards, not merely because of serious losses to the country's automotive industry due to imported goods, including from Indonesia. However, the Philippines is currently afraid of the country's trade balance, so they take the safeguarding policy.

For your information, when a country imports more than exports it will make the country's trade balance deficit. For this reason, the Philippines is trying to stem car products from Indonesia.

"So if we see with the naked eye, they are actually scared again, because their trade balance is disturbing their current account deficit," he said.

The former Indonesian Ambassador to the US said that basically, the Philippines does not have a car industry. Even if there are industries in the form of complete knockdown (CKD) or cars that are assembled domestically, this is different from the car industry in Indonesia, which generally produces completely built-up (CBU) or cars that are made intact.

In fact, said Lutfi, the implementation of these safeguards would actually disturb automotive importers in the Philippines themselves. Even so, Lutfi ensures that he will continue to make various efforts so that Indonesia is free from the imposition of the BMTPS. Currently, the government has also submitted an objection to the Philippines.

"So they tried (the safeguard). But yes, we will face it because these are parts of the trade", he said.

Previously, the Philippine authorities decided to impose BMTPS on automotive products from all countries that export to the Philippines, one of which is Indonesia.

The BMTPS is in the form of cash bonds with a value of PHP 70,000 per unit for passenger cars/vehicles and PHP 110,000 per unit for light commercial vehicles.