ANNOUNCEMENT 21 May 2012In May 2012, the government of Indonesia announced a change in the required local inputs to serve domestic customers.
NUMBER OF INTERVENTIONS
WTO-UNCTAD-OECD Eighth Report on G20 Trade and Investment Measures, mid-May to mid-October 2012: http://www.oecd.org/daf/internationalinvestment/8thG20report.pdf
Regulation 76/PMK.011/2012, in Bahasa Indonesia: http://bpkimi.kemenperin.go.id/bpkimi/media/76pmk0112012.pdf
Regulation 76/PMK.011/2012, unofficial English translation: http://rulebook-jica.ekon.go.id/english/4770_76_PMK.011_2012_e.html
GAIKINDO Member list: http://gaikindo.or.id/index.php?option=com_content&task=blogcategory&id=97&Itemid=130
In Regulation no. 76/PMK.011/2012 of May 21, 2012, the Indonesian Ministry of Finance has eliminated import tariffs on machinery, goods and materials used in the motorised vehicles assembling and components industries. In order to benefit from the exemption, at least 30% of the total value of machines used must have been locally purchased.
This measure qualifies as a discrimnating local content regulation rather than a liberalising tariff elimination, given that the measure provides companies with an incentive to buy local and the tariff elimination is used as a reward for that. The preamble to the Regulation explicitly states that it was introduced in order to support the Indonesian motor vehicle assembly industry.
The affected trading partners are identified by listing the countries of provenance of the members of GAIKINDO, the association of Indonesian automotive industries. Only the members listed as manufacturers in GAIKINDO's member list were considered.
The regulation is an amendment of the initial regulation 176/PMK.011/2009, which covered the local content promotion scheme for other sectors than the motor industry (cf. Related Measures).