KONTAN.CO.ID – Jakarta. Indonesia has become one of the countries providing protection for trade in goods, and is actually the subject of controversy in the World Trade Organization (WTO).
The problem is that the WTO is also seen as unable to control the rise in commodity prices caused by the war and the many guarantees from other countries on commodity exports. So, is the WTO still worthy of being the judge of international trade?
Dani V. Kurnia, an international trade columnist, said whether the WTO is appropriate as a regulator of international trade as there are currently no alternatives to regulate trade.
Does judgment matter? Yes, it matters. Because the court can be the guardian that will stop a country that wants to commit fraud. So that everything can be settled in court,” Kontan.co refused on Sunday (November 9). I said.
He added that, despite its many shortcomings, the WTO has many advantages, namely as an institution that regulates the management of international trade. Therefore, the WTO is needed to ensure the openness of international trade, so that all countries can trade their domestic goods.
“So in this case it does not mean that the WTO is bad. So think differently. The question is how to change the export rules so that the country has the opportunity to restrict its exports if necessary, ”he explained.
In the context of this issue, many countries, including Indonesia, want to reduce exports by suppressing exports, apparently without regulation.
However, according to Denis, referring to Article XI:1 of the General Agreement on Tariffs and Trade (GATT) of 1994, which allows the state to regulate, prohibit and restrict the export of raw materials when required by domestic industry, therefore for itself. This article is actually correct because other countries have a right to raw materials, but the country itself has a right to raw materials.
“Therefore, the export of raw materials should not be hindered, but if it is needed within the country, this is normal. Regarding Article XI of the GATT: 1,” he explained.
In addition, there are indeed rules in the WTO rules that give countries the opportunity to use raw materials for the benefit of their own countries. However, since the GATT and WTO rules were agreed upon in 1993, the interests of downstream developing countries have not been taken into account or discussed.
Thus, there are no specific rules in GATT Article XI:1 that would justify a government export ban on manufacturing industries. This is what the EU argued, and then the WTO judge said it was wrong.
In addition, the problems of the EU are related to the Law No. 4 of 2009 “On Minerals and Coal Mining”, which prohibits the export of raw materials for mining products. The EU believes that the passage of the Minerba Law makes it difficult for them to compete in the productivity of the steel industry, especially in the EU stainless steel industry.
Therefore, according to Denis, the government must find a strategy that would allow it to continue processing minerals in the country, as it faces opposition from countries that believe that access to raw materials is difficult.
For example, provide compensation in consultation with the EU to avoid disputes over this export restriction. For example, getting more compensation for exporting to Indonesia.
“However, in negotiations with the EU, no one should know. Later, other countries interested in nickel, such as Japan, may join in and demand compensation or make a fuss about the same thing,” Danny said.
In addition, the government’s proposed introduction of new rules by Indonesia, such as an export tax on nickel ore products, could be a tactic to evade a WTO ruling.
According to him, an export tax may be the right tool for the government in such cases. Under WTO rules, a country can impose export restrictions if it achieves certain goals. On the one hand, the goal is to meet domestic demand for raw materials.
“It was suggested that I appeal if it makes me change my mind. Because I need more money. Also, if the case is the same and then appeal, the rules remain the same. How can you win? So you’d better change the bylaws, but that’s all to protect the domestic supply of raw nickel,” he added.