Philippines-exports to Indonesia.

PHILIPPINES-A SHARE IN INDONESIA’S LUCRATIVE MARKET.

THE GOVERNMENT and several export groups are wary of a new Indonesian trade regulation that they said was "defensive" and "protectionist" as it creates additional requirements for importers there to bring in certain goods.

While clarifying that the Philippines will not be largely affected by the policy, experts said the new rules undermines Association of Southeast Asian Nations (ASEAN) integration.

The Indonesian Trade Ministry’s Regulation No. 44, which came into effect last December 15 and will last until the end of 2010, provides that firms that import electronic goods and components, food and beverage, garments and footwear will have to seek yearly approval from their government and submit an "import plan" that will detail the quantity of goods they plan to bring into Indonesia in a given year.

These imports will also be subject to inspection before they are loaded onto Indonesia-bound ships.

The regulation was passed "considering the global economic crisis which has resulted in uncertainties and created unfavorable impacts to [sic] the Indonesian economy," the document read.

"Offhand, there will not be an immediate effect [to Philippine exporters]ŠThe products covered there are items we compete in," Bureau of Export Trade Promotions (BETP) director Senen M. Perlada said in a phone interview earlier this week.

Exports to Indonesia accounted for $488 million, or only 1.3%, of the $1.014-billion total exports in the first nine months of 2008, latest central bank data show.

BARRIERS

"[But] obviously these are defensive mechanisms being put in place. We don’t want to have more barriers to trade, especially when markets are contracting," Mr.. Perlada said.

"As ASEAN partners, we will have appreciated if initial consultation were done. While it is the economic slowdown [and not the new regulation] that is affecting exports, over the long-term we willn’t welcome this," he added.

Leaders of some export groups were of the same opinion.

Semiconductor and Electronics Industries of the Philippines, Inc. President Ernesto B. Santiago said Indonesia was not a major market for electronic exports.

"We’re not really affected. [We do not export a lot to them] because they have their own plants there," Mr. Santiago said said in a telephone interview yesterday.

"But it affects ASEAN’s integration. Hopefully, this will be temporary as they try to manage the downturn," Mr. Santiago.

"It will have been better if ASEAN members had the same export and import regulations," he added in Filipino.

Motor Vehicle Manufacturers Association of the Philippines Vice-President Ferdinand I. Raquelsantos, for his part, said in a separate telephone interview: "We don’t have exposure to Indonesia. But that’s one way of protecting their own industry. They have a very good parts base there."

Processed food exporters likewise said Indonesia was not a significant market for them.

Philippine Association of Meat Processors, Inc. Executive Director Francisco J. Buencamino said the local industry "does not yet export to Indonesia."

"But I’m speculating that this is a non-tariff barrier. Why are they restricting imports?" Mr. Buencamino said in a separate phone interview.

For Philippine Food Processors and Exporters Organization President Roberto C. Amores, however, the regulation "is not a non-tariff barrier."

"Even if were considered a trade barrier...we have ASEAN preferential tariff agreements".