Safeguard was one of the protective instruments in international trading which was similar to anti-dumping. The three instruments were regulated in WTO which regulated that certain imported products could be charged with extra tax if they caused injury on importer nation. Safeguard was also regulated by Indonesia law i.e. keppress no 84 year 2002on securing domestic industry against storming import and regulation of the ministry of trade no 37/2008 on certificate of origin for ported goods which were being controlled.
Based on the safeguard agreement every country had the right to take action to protect their domestic product in the event that the domestic Industry were unable to compete and suffer serious losses as result of flooding foreign products. Today’s phenomenon was acts of safeguarding increasing by intensity all over the world in the effort to protect the domestic market from the invasion of imported products. “Every country was allowed to safeguard their domestic market. That was the trend that heightened acts of safeguarding.” The deputy minister of trade Bayu Krisnamurthi was quoted as saying in Jakarta on Monday [22/4].
Bayu saw that world’s economic slowdown had increased acts of safeguarding among nations. Therefore Indonesia must step up capability clarify any case to WTO; the objective was to safeguard the domestic market from the present world economic condition, bayu called out all parties to wisely encounter all problems. Stepping up of capacity and capability was needed to overcome all problems.
Bayu showed as an example the case when recently the US government brought a case to WTO in regard to regulations on import of horticulture products by Indonesia and axing of quota for importing cow’s meat. Now again the USA made accusation addressed to Indonesian export products. This time, the target was frozen shrimps. Bayu explained that coalition of Gulf Shrimp Industries [COGSI] of the USA had addressed petition of anti-subsidy to Indonesia in regard to export of frozen food. The accusation was not only addressed to Indonesia but also to India, china, equador, Vietnam, Thailand, and Malaysia.
The deputy minister of trade remarked that global economic crisis had spurred on acts of safeguarding by nearly all countries of the world. The objective was to protect their respective domestic industry and win the global competition amidst shrinking market absorption capacity. He said that many countries were exercising safeguarding practices to keep their industries from closing. On the other hand, there were countries who gave incentives to their industry which was in fact prohibited by WTO.
He admitted that Indonesia had also implemented trade remedies instruments like anti-dumping and safeguard. According to Bayu Indonesia had to do safeguarding as there were certain conditions which disadvantaged the domestic industry. He claimed that Indonesia had exercised anti-dumping claims to wall out import of cheap products which threatened the domestic industry. Indonesia had also exercised safeguard in the form of import tax or import quota. So far Indonesia had never extended subsidy on the national industry.
Bayu reminded that economic contraction Europe and American in 2013 might generate the impact of flooding import in Indonesia. He disclosed that the USA and Europe commanded over 50% or USD 30 – USD 35 trillion of the world’s total economy which amounted to around USD 70 trillion. However, many circles predicted that this year Europe would have contraction of 1% and North American 1%- 2% or equal to GDP downturn of Rp300 billion in the two regions.