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NEWS UPDATES 20 December 2009

China-Assean Free Trade:
Indonesian cosmetic, herbal medicine producers want FTA delay

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Indonesian cosmetic and jamu (herbal medicine) producers are calling for a postponement of the Asean-China free trade agreement for their products, national news agency Antara reported.

"We want the implementation of the Asean-China FTA postponed until there is a strict supervisory system on cosmetics and jamu imports, especially those from China," Putri K Wardani, chairperson of the industrial section of the Indonesian Cosmetic Producers Association (Perkosmi), said.

"It is not because we are not ready. The question is our products are even now having to compete with illegal Chinese imports which are usually cheaper but of questionable quality," Putri said.

Putri, who is also chief executive officer of traditional cosmetics and jamu maker PT Mustika Ratu, said in 2008 the cosmetics trade in Indonesia reached a total value of abour 30 trillion rupiah, and the jamu trade 6 trillion rupiah to 7 trillion rupiah (1$=9470 rupiah) a year.

But now almost 50 percent of the domestic cosmetics and jamu market had been taken over by lower-priced Chinese products, she said.

Putri said Chinese products were able to dominate domestic markets mainly because of their much lower prices compared to local products. But unlike exported Indonesian goods, the Chinese goods generally did not carry proper or understandable labels, she added.

She called on the health ministry`s Food and Drug Supervisory Board (BPOM) to conduct quality checks on all cosmetic and jamu products circulating in the country to see whether they were legal and safe to consume.

The customs office should also be involved in the examinations to determine the legality of the products in the market, Putri said.

The Asean-China Free Trade Agreement (FTA) is to come into force on January 1, 2010. But not all of Indoensia`s production sectors are ready to compete with Chinese products.

Acccording to the economic affairs coordinating ministry, of the approximately 2,500 production sectors in Indonesia, 303 are considered still unable to survive under the FTA.

Among the products still lacking competitive capability were cosmetics, textiles, steel, electronics, tires, furniture, cacao processing, healthcare instruments, aluminium, upstream petrochemicals, sheet glass, footwear, machine tools, motor vehicles.


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