Flood of Chinese products prompts review of FTA in Indonesia
May 15, 2012
The Association of Indonesian Employers (APINDO) supports the government`s plan to review the implementation of the Free Trade Area (FTA), said APINDO chairman Sofyan Wanandi.
"The loss in the industrial sector is caused by floods of Chinese products in the Indonesian market," he stated here on Wednesday in response to the plan of the Indonesian government and other countries of the Association of Southeast Asian Nations (ASEAN) to review the FTA.
According to Sofyan, Indonesia suffered a loss and trade deficit of US$39 billion in its trade with China last year.
"This year, the loss and deficit could possibly be bigger, and FTA re-negotiations must be done this year as imports from China are bigger that Indonesia`s exports to China," he observed.
He remarked that poor infrastructure was another factor that had contributed to the loss, apart from low exports.
The ASEAN-China Free Trade area was implemented as of January 1, 2010.
"Following the implementation of the FTA, infrastructure remains unimproved by the government, making the competitive power of the domestic industries steadily decline," he continued.
Sofyan pointed out that the FTA scheme benefited China, and that Indonesia is one of the potential markets for products from China.
"China has exported a lot of goods to Indonesia at a low price and also a low quality," he added.