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Indonesia left behind in APEC new deal on green pact
Publication Date : 07-09-2012
Ministers of Asia-Pacific Economic Cooperation (APEC) member economies forged a consensus yesterday to include 54 environmental goods in the list of products subject to tariff caps by 2015.
The pact was made amid opposition from Indonesia and Vietnam, who insisted on having fewer goods covered and wanted developed nations to give further consideration to their counteroffers in exchange for supporting the policy.
After the final ministerial meeting, which was coloured by heated debate over the policy, Russian Economic Development Minister Andrey Belousov announced that APEC member economies would undertake a commitment to cut customs duties to 5 per cent by 2015 for the 54 categories of goods.
"They will be traded almost duty-free if the leaders endorse the list [during the APEC leaders meeting on Saturday and Sunday]," Belousov said at a press conference.
"We are seeing a new market emerging for environmental goods. Why would I call it a breakthrough? Because this goal to draft such a list was formulated by the World Trade Organisation (WTO) back in 2001. It took WTO over 10 years to try to agree on the list and they failed."
However, should an APEC member overturn the consensus during the leaders meeting, the pact could not be adopted, Belousov added.
Indonesian Trade Minister Gita Wirjawan could not yet disclose Indonesia's stance on the issue, as he was still engaged in intense back-channel negotiations with officials from developed nations to ensure Indonesia's interests were covered.
According to an official who attended the ministerial meeting, Indonesia and Vietnam basically supported the consensus, but were reluctant to have more than 20 goods covered.
The 54 goods categories agreed upon cover more than 300 items, including chopsticks, bicycles, turbines, generators, and bamboo products.
Solar panels, which have a huge market at home, are still excluded from the list.
"We're not concerned about the tariff cut. Our objection is more on fairness. What's the trade-off for us in supporting the policy?" said the official, who preferred anonymity.
The official also said that in exchange for its support of the consensus, Indonesia proposed the inclusion of crude palm oil (CPO) in the list of environmental goods subject to the tariff caps. Indonesia is the world's largest CPO producer.
"The final decision will now be left to President Susilo Bambang Yudhoyono whether to accept the pact or not," said the official.
Wishnu Wardhana, the Indonesian representative to the APEC Business Advisory Council, said he would fight to have CPO included in the list.
"It's just not a fair consensus. We're going to push CPO as our counterproposal," said Wardhana, who is also a top executive at publicly listed coal producer PT Indika Energy.
Deputy chairman of the Indonesian Chambers of Commerce and Industry, Anindya Bakrie, who also attended the APEC meeting, advised the government against rushing to forge a deal.
"The government should discuss with related stakeholders before agreeing to the demands of developed nations. I am worried the deal will bring more costs than benefits," he said.
APEC was established to take advantage of the growing interdependence among Asia-Pacific economies, to facilitate economic integration and liberalisation.