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PrintIndonesian lawmakers approved on Tuesday a new trade law that granted the government greater authority and control over trade affairs.
In what may seem as unusual in the country’s tepid decision-making, lawmakers and government officials were quick to agree and make a decision on the new law, which is expected to be signed by President Susilo Bambang Yudhoyono in the next three months.
“The law strengthens [claims] that Indonesia is not adopting a free-market approach,” said Deputy Trade Minister Bayu Khrisnamurti. He added that the law granted the government more flexibility in policy to intervene and provide protection to the country’s companies.
“We are a country that tries to seek balance between good and efficient market mechanism and the need to protect our businesses,” he said.
The new trade law is made of 19 chapters and 122 clauses. It will replace the existing law to regulate trade that is a heritage of the country’s colonial past.
With the new law, pursuing national interest is high on priority, ranging from banning to limiting trade.
One clause, known as Number 54, would limit imports or exports that are allowed for the reason of being in the nation’s interest such as fulfilling domestic demand and protecting domestic industries.
It also addressed the Indonesia’s international trade arrangements with clause Number 87 stating that the government can grant preferential treatment to least-developed countries while still being in the nation’s interest.
The new trade law is in keeping with the decision taken during the World Trade Organization’s Ninth Ministerial Meeting last year in granting trade facilitation to LDCs. Clause Number 87 signified Indonesia’s rising confidence in international trade, according to the deputy minister.
“We have reached a certain stage to be confident in granting trade facilities to least-developed countries,” he said.
The new trade law also creates legal framework for e-commerce practices, which is currently unregulated, said Bayu. “It provides protection, guidelines and directions to both Indonesian consumers and traders of e-commerce.”
It was the second significant regulatory change in the way of doing business in Indonesia. Last December, lawmakers approved the new industrial law, which also conveyed similar themes of increasing the state’s role.
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