Indonesia plays down U.S. dumping accusation

15:36, October 19, 2009      

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Indonesia has no concern over the U.S. allegation of subsidies and dumping concerning Indonesia's coated paper products, saying that the U.S. making up the accusation, local media reported Monday.

Indonesian Trade Ministry's director general for international trade cooperation Gusmardi Bustami was quoted by the Jakarta Post as saying that the government was to respond on the accusation.

Last Thursday, the U.S. government announced it would initiate an investigation into allegations by U.S. firms and unions.

"We'll be ready when they send their questionnaires. We'll be cooperative and will surely present all the data required," he said.

"The Finance Ministry and the Forestry Ministry (which are also involved in the allegations), among others, will (respond) too," Bustami added.

The U.S. government is accusing the Indonesian government of providing coated paper producers with subsidies via tax incentives made possible under a 2007 Indonesian government regulation to facilitate investment in priority business lines and /or designated regions.

The regulation, which has since been replaced by a 2008 government regulation, provides eligible companies with income tax cuts of up to 30 percent for six years.

Scores of U.S. coated paper producers filed their petition on Sept. 23 with the U.S. Department of Commerce and U.S. International Trade Commission against Indonesian paper producers PT Pabrik Kertas Tjiwi Kimia and PT Pindo Deli Pulp and Paper Mills, both subsidiaries of the Sinar Mas Group, complaining in respect of alleged subsidies and dumping practices.

This is the second time the U.S. government has made such allegations since 2006, when the U.S. Department of Commerce initiated an investigation on dumping and subsidy allegations against Indonesia's coated-free sheet paper, but then dropped the complaint on Nov. 30 in that year after finding no evidence of negative effects on U.S. producers.

Gusmardi said the US government was also "making things up this time".

Sharing similar sentiments, Sinar Mas Group executive director Gandhi Sulistianto alleged that the U.S. government was trying "to protect its domestic manufacturers because they are unable to compete with Indonesian and Chinese products."

"Indonesia's market share (on the product) is less than 3 percent (a minimum requirement for a country to impose punitive tariffs upon unfair trade) in the U.S.," he said.

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