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12 February 2010

Indonesian businesses urged to lobby Chinese exporters

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The Indonesian government has asked Indonesian businesses to use persuasive measures to curb the possible influx of cheap Chinese products into the country, reported the Jakarta Post.

Edy Putra Irawady, Deputy Coordinating Economic Minister on industry and trade, said in Jakarta on Wednesday that using persuasive measures might be more effective than asking for a renegotiation of the free trade deal.

Indonesian businesspeople could, for example, lobby their business counterparts in China to voluntarily lower their exports to the Indonesian market, especially those related to products that could hurt small- and medium-scale companies.

Edy said that Indonesia, along with other Asean countries, could negotiate with China for the so-called voluntary export restraint to anticipate the influx of Chinese products in Asean markets as the consequence of the Asean and China Free Trade Agreement (ACFTA).

Businesses in Asean member countries are concerned the implementation of the free trade agreement with China in January will result in the influx of cheaper products from China.

They have demanded their respective governments renegotiate the delay in the full implementation of the free trade agreement so they will have more time to prepare  for the tough competition from China.  

Edy said that Malaysian businessmen, for example, were proposing their business counterparts in other Asean member countries work together in persuading Chinese producers to voluntarily limit their exports.

Malaysia’s chamber of commerce and industry had also asked the Malaysian trade minister to work together with their counterparts in Asean countries to lobby the Chinese government.

He said that Indonesia, for example, had asked China to lower its exports of garments, electronics, herbal medicines and cosmetics to Indonesia, “by, say, annually 10 to 15 percent of export value in 2008”.

In turn, China could benefit from higher values of the referred categories of goods as supplies in that captive market would be limited, said Edy.

He also said that Indonesia could impose a unilateral export restraint if the voluntary export restraint was fruitless.

The government’s coordinating team for industry and trade problems has spoken to prominent businessmen, including Sofjan Wanandi, Rahmat Gobel and Benny Soetrisno, asking them to lobby Chinese businessmen who imported raw materials from Indonesia to instead process them here, he said.

“I told them to go to China and meet businessmen with China’s chamber of commerce and industry.

“Go tell them the [Indonesian] government is considering limiting exports of raw materials to manage the trade system from upstream to downstream,” said Edy.


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