The Indonesian government plans to exempt duty on steel products for automotive and electronic industries imported from Japan under the Economic Partnership Agreement (EPA) to be signed later this month, an official said Monday.

Japan has urged Indonesia to liberalize all steel products which are not produced in Indonesia, but the government will limit the zero-percent duty to steel products for automotive and electronic industries.

"We intend to open steel market only to automotive and electronic industries under the EPA," said Anshari Bukhari, director general of metal, machinery and textile industries with the Industry Ministry.

The government is object to the Japan's demand for wider liberalization as local steel industry plans to expand production to new products, including gas pipes which are currently supplied from the international market.

"We only agree with two products (for automotive and electronic industries) but they (Japan) demand the privilege be expanded to all products not produced here," he was quoted by the national Antara news agency as saying.

Indonesia's steel import values at approximately 1 billion U.S. dollars a year. Automotive and electronic industries rely heavily on imported steel, mainly from Nippon Steel, he said.

Local steel industry still produces low-end products for the construction sector, with annual production averaging 4 million tons.

The government and local steel industry are primarily object to the liberalization of hot-rolled coil and its derivative products, he said.

Source: Xinhua