Friday, January 1, 2010

The Asean-China FTA Begins

People in Indonesia, including the government, have been very busy thinking, talking and doing things which are related to Indonesian domestic matters, like Corruption & Injustice, that they forgot that the ASEAN-China Free Trade Agreement (FTA) will come into force today.

Under this agreement, China and six founding members of Asean, Indonesia, Malaysia, Thailand, the Philippines, Singapore and Brunei, will remove tariffs on around 7,000 product categories. While the other Asean members, Vietnam, Burma, Cambodia and Laos, will follow on 2015.

The problem is that industries in Indonesia, e.g Steel, Textile, Furniture, have stated that they are still not ready to compete with very cheap Chinese products and requested for temporary postponement of the implementation of FTA. However, considering that the government has not responded positively, therefore Indonesia have to implement the FTA.

For details, please click here, here, here and here.

In spite of the above, I still hope that the government will use its rights, as given by the FTA, to request for at least 3 years postponement, merely because the FTA will have great impact on our industries and cause massive operational close down that will cause massive unemployment and social-politic instability.

10 comments:

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H. Nizam said...

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colson said...

Shipyards, textile, leather, mining - all of these industries disappeared from Western Europe ( and the US) practically overnight when the free market policies were adopted in the eighties, leaving a generation of workers unemployed.

So, to prevent something similar would happen to RI, I think it would be very wise if the Indonesian government would take your advice at heart: 'buy' time to offer the threatened industries a possibility to increase their competibility.

H. Nizam said...

Colson,

Precisely. The government has set up a special team to handle matters pertaining to the FTA but I don't know what is their intention. But I think that in this new year's day we should be positive.

stugod said...

happy new year harry best regards from stugod and family

H. Nizam said...

Stugod,

Happy New Year to you and you family

Yari NK said...

I watched the newsticker on the television today that Singapore, Malaysia and Thailand have begun actualising their free trade with India. Is there a chance for us to follow suit?

H. Nizam said...

Yari,

Happy New Year to you and your loved ones. Those countries must have doing it individually not within the framework of Asean, I am not sure.
I think we should prepare our selves first. The funny thing is that we allow exports of timber/logs to other countries who will produce a.o. furniture that will be exported again to Indonesia. The same goes with our Tin, Iron sands.
We should forbid export of such raw stuffs. Beside that we should also arrange lower tax for expor and lower bank interest rate, etc.
On top of all the manufacturers should press their costs to a very minimum.
All that done maybe we can open our own market to other countries products free of customs charges.

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