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23 February 2010

Local requirements may help reduce ACFTA impact

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The impact of the Asean-China Free Trade Agreement (ACFTA) could be dealt with by the enforcement of Indonesian National Standards (SNI) requirements, the Antara quoted a business leader as sayin.

"The government must cooperate with the business community and universities in connection with the SNI’s imposition which must immediately be carried out," the chief of the Association of Indonesian Businessmen (Apindo), Sofyan Wanandi said.

He said the imposition of SNI was the homework of the industry ministry that had to be immediately done as a lot of Indonesian products have not yet been SNI labelled.

"Of the thousands of Indonesian products only around 50 have been standardized," he said after meeting with regional Apindo board members.

He said the industry ministry could conduct SNI labelling on the Indonesian products within three to six months as the process would not take long.

"This must be immediately done as SNI labelling could at least reduce distribution of fake products or products with a low quality in the market," he said.

Sofyan said the government should not be afraid if the SNI imposition would later be rejected by the World Trade Organization as it was urgently needed.

"Do not think of that the SNI imposition must be approved by the WTO. What the government should do is just make the decision. Whether it will be approved or not by the WTO later it is a future question," he said.

He said even the US once did things like that when it decided to stop imports of steel from across the world, pending consolidation that took around 10 months of its industries to make them more efficient.

He said the government also had to maximise the task of its anti-dumping, drugs and food supervision, quarantine, customs and excise and tax agencies as the funds for the agencies are short.

"The anti-dumping agency for example only has funds of 4-5 billion rupiah while it takes around 2-3 billion rupiah to deal with an anti-dumping case of a textile product from Brazil," he said.

Sofyan also emphasized the importance of tax collection because a lot of products from China did not pay value-added tax. If that is optimised Indonesia can stand assaults of Chinese products, he said.

"In the long term however the government must continue to develop the supporting infrastructure to reduce economic and transportation costs," he said.


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