Minister Mari Elka Pangestu said over the weekend that a postponement of the implementation of the Asean-China Free Trade Agreement was not an option and that Indonesia must rely on other methods to protect its domestic market and limit damage to its companies and workers.
“We have set up a team to study and evaluate everything. The important thing is how to improve the competitive edge of Indonesian products,” Mari said on Saturday.
“The next thing we have to think about is how to protect the domestic market because we have to ensure that the products circulating in the market meet our standards and do not endanger consumers,” she said.
The trade deal, which came into effect on Jan. 1, created the world’s third-largest free trade area with a population of 1.9 billion, a combined gross domestic product of US$ 6.6 trillion and total trade of US$ 4.3 trillion.
The government has sent mixed messages in its response to the pact.
Benny Soetrisno, chairman of the Indonesian Textile Association (API), on Friday criticized the government’s slow and apparently confused response to the trade deal.
“The government has not been 100 percent sure where to go next, even though the FTA has been in place for almost a month,” he said.
Industry Minister MS Hidayat has called for the FTA to be renegotiated, saying he feared full implementation would cost many Indonesians their jobs, with the steel, textile and furniture sectors suffering the most.
Mari, meanwhile, has defended the deal, saying it will be good for domestic exporters and will bring badly needed foreign direct investment from Chinese firms. On Wednesday, the House of Representatives jumped on the bandwagon, demanding that the government conclude a renegotiation of the implementation of the deal within six months.
On Saturday, Mari said the Trade Ministry was considering a number of instruments to protect the country from unfair trade practices. “We can impose anti-dumping duties on such products,” she said.
The Trade Ministry had also had taken positive steps by encouraging the use of local products as set forth in Presidential Instruction No. 2 of 2009. Under this instruction, all government agencies, including state-owned companies and regional government-owned companies, must give priority to local products in their purchasing.
The Trade Ministry will also continue to launch “love Indonesian products” campaigns, Mari added.