ASEAN KEY DESTINATIONS
Stung by Asean-China deal, Indonesia wants FTA delay
Industry Minister MS Hidayat has asked for a postponement of the free-trade agreement between Indonesia, Australia and New Zealand to allow for further study.
“If an FTA is to be concluded, a list of its advantages and disadvantages must be made first and an intensive discourse with the business world must be held,” the minister said on Saturday.
He said studies, discourse and pointing out sectors that would be affected by the agreement were important to avoid the emergence of problems after the deal was signed.
“It should not happen that the FTA will only benefit Australia while the expected investment doesn’t take place in the country,” the minister said. He said the most important thing was bringing benefit to and serving the interests of Indonesia.
Government officials and business figures have complained recently about being on the short end of trade agreements.
Hidayat cited the Asean-China Free Trade Area as an example, saying it resulted in losses to a number of local industries, such as textiles and textile products, footwear, electronics, furniture, toys, machinery, steel and cosmetics. Government figures show reduced production between 25 and 60 percent, while domestic sales, profit and manpower fell between 10 and 25 percent.
“In order to overcome this problem, the ministry is carrying out coordination to take precautionary measures and increase competitiveness,” he said.
Indonesia’s increased wariness has delayed a free-trade agreement between Asean, Australia and New Zealand. The AANZFTA came into effect on Jan. 1, 2010, for Australia, New Zealand, Brunei, Burma, Malaysia, the Philippines, Singapore and Vietnam. Thailand followed soon after, while Laos and Cambodia ratified the agreement in November.
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