RESTRICTED
WORLD TRADE G/STR/Q1/IDN/6
18July1997
ORGANIZATION(97-3054)
Original: English Working Party on
State Trading Enterprises
STATE TRADING
Replies toQuestions Posed byAUSTRALIA1andtheUNITED STATES2
Concerning theArticle XVII Notification ofINDONESIA3
Thefollowing communication, wasreceived 11July1997fromthePermanent Mission ofthe
Indonesia.
_________________
Question from Australia
Wewould liketoseekconfirmation thatthearrangements ofBULOG havenotchanged
asaresult ofIndonesia 'sUruguay Round commitments. Weareparticularly interested toknow
ifprivate importers arepermitted tohandle anyportion ofthetrade.
Reply
There hasbeenachange inthetrading arrangements ofBULOG aftertheconclusion ofthe
Uruguay Round, especially withrespect tothetrading arrangements forsoybean meal. Through the
introduction oftheDecree oftheMinister ofTrade andIndustry No.67/MPP/Kep/3/1996 onthe
Liberalization ofSoybean Meal Import Procedure, asof1April 1996 theregulation imposed onthe
ratiobetween imported soybean mealandtheabsorbed domestic soybean mealproduct isnolonger
applicable andprivate entities canimport itdirectly with0%tariff. Thisdecision wastaken 21months
ahead oftheGATT provision onthephasing outoflocalcontent requirements within threeyears ending
31December 1997. Consequently, thesolerightofBULOG tocontrol trade insoybean mealimport
hasbeeneliminated since theentry intoforce ofthedecree.
Question from theUnited States
1. Could Indonesia please clarify BULOG ’sroleinthedomestic andinternational market
forother agricultural commodities?
1G/STR/Q1/IDN/4,2G/STR/Q1/IDN/3.
3G/STR/N/2/IDN.
./.G/STR/Q1/IDN/6
Page2
Reply
1. Themainobjective oftheGovernment oftheRepublic ofIndonesia ingranting exclusive rights
toBULOG istoensure foodsecurity inthevast-ranging Indonesian archipelago which havespecific
problems intheproduction anddistribution ofbasic orstaple foods. Therefore, theroleofBULOG
istominimize excessive foodpricefluctuations, particularly forstaple foods, soastoprovide certainty
withregard tofuture prices. BULOG 'soperations arealsoaimed atprotecting consumers through
stable foodprices bywayoflimiting thedirect effects thatfoodprices haveonthecostofliving and
toensure foodavailability throughout thecountry.
2. Toensure availability ofsugar atreasonable andaffordable prices throughout thecountry,
BULOG controls theentire production ofsugar inthecountry. Thedistribution andmarketing ofsugar
arecarried outbythousands ofcooperatives, wholesalers andretailers based onmarket demand. If
thedomestic production isnotsufficient, BULOG willimport thenecessary quantities tobridge the
gap.
3. BULOG hasthesolerighttoimport wheat andwheat flourfordomestic consumption, while
theprocessing ofwheat intoflour isdonebytheprivate sectors. Themarketing anddistribution of
wheat andwheat flour inthecountry arecarried outbythousands ofcooperatives, wholesalers and
retailers based onmarket demand.
4. Regarding soybeans, theGovernment ofIndonesia hasbeentrying tomeettheever-increasing
domestic demand. Since domestic production isnotsufficient, theremaining gapisimported by
BULOG.
2. Could Indonesia please clarify thestatus ofAPKINDO asanenterprise asdefined in
Article XVII?
Reply
Notyetavailable andwillbecommunicated induecourse.