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NEWS UPDATES Asean Affairs        26  March 2011

Indonesia to protect industries from Chinese goods

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The Indonesian government will protect the country's manufacturers from a huge influx of Chinese products after the implementation of the Asean-China Free Trade Agreement last year, Industry Minister MS Hidayat said.

"Most of the incoming products are below our standards," the minister said after a cabinet meeting at the Presidential Palace on Thursday.

"[The cheap goods] are also because of dumping. We will exhaust all efforts, including implementing safeguards."

He did not say which products would be protected or how safeguards would be implemented.

Hidayat said there were at least 38 reports of alleged dumping of goods from China, and he pledged to speak with the industrial community to hear its complaints.

As part of the trade pact, China and the 10 Asean members must scrap tariffs on about 90 percent of goods. Duties must be cut to no more than 50 percent on "highly sensitive" items by 2015.

Citing a recent Industry Ministry survey, Hidayat said five industrial sectors - electronics, furniture, metal, textiles and machinery - had been hit hard by the implementation of the free-trade agreement.

It also revealed a strong relation between the implementation of the agreement and the declining production in those sectors.

Hidayat said the safeguards would be implemented in the case of unfair competition, such as unequal taxation. "It will be our own mistake if China gives lower rates than us," he said.

Trade Minister Mari Elka Pangestu said the government was prepared to apply safeguards. The Trade Ministry will investigate whether there is a correlation between high import volume and injury to the local industry, as was reported by the Indonesian Textile Association (API).

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