On 1 January 2010, Free Trade Agreement (FTA) between 10 members of the Association of South East Asia Nations (ASEAN) and the People's Republic of China shall be implemented.
As a consequence, 2,528 goods manufactured in the People's Republic of China will be able to enter the ASEAN market free of any customs.
For Indonesia, where most manufacturers of those products have expressed that they are not ready, implementation of FTA would be like committing an industrial suicide.
Business and manufacturers associations like the Indonesian Iron & Steel Industries Association (IISIA), Association of Indonesian Businessman (Apindo), Indonesian Cosmetic Association (Perkosmi), have stated that their products are not yet ready to compete with much cheaper Chinese goods. Even before the FTA, Chinese good have taken quite a large portion of the market share.
The Coordinating Minister for Economy said that 303 products are not ready to compete e.g. cosmetics, textiles, steel, electronics, tires, furniture, cocoa processing, health care instruments, aluminium, upstream petrochemicals, sheet glass, footwear, machine tools and motor vehicles.
Due tho which facts, the Chairman of APINDO Sofyan Wanandi urged the government to use Article 23 of the FTA which enable countries to request for postponement of implementation of the FTA.
For detailed media reports on the above matter, please click here, here, here, here and here.
I hope that the government realize the devastating impact that the FTA will have on our economy i.e. stop of industries which will lead to widespread unemployment, and therefore postphone Indonesia's implementation of the FTA on products which we are still not ready for at least 3 years.
Image: Courtesy of Deplu Junior.