Indonesia textiles 'risk tariff barriers' in U.S.<\/p>\n
Zakki P. Hakim, The Jakarta Post\/Jakarta<\/p>\n
Indonesia risks losing competition in the U.S. textile and
\nclothing market after the abolition of the quota system on Jan. 1
\nnext year, as the country should pay higher import duties for the
\ncommodity than other suppliers to enter the U.S. market, an
\nexpert said.<\/p>\n
Once the quota system is lifted, tariffs would become the main
\nfactor determining access to the U.S. market, said William E.
\nJames, a senior economist at USAID's Growth through Investment
\nand Trade (GIAT) project.<\/p>\n
In anticipation of the abolition of the quota system, many
\ncountries had been negotiating for a low tariff for the
\ncommodity, while Indonesia had yet to make a similar move, due to
\neither lack of understanding or concern about the impact of the
\nsituation.<\/p>\n
\"Indonesia should have made a strategy and negotiated for
\nlower tariffs to enter the U.S. market years ago, if it wants to
\nstay competitive,\" James told The Jakarta Post over the weekend.<\/p>\n
He said his organization had talked with the Indonesian
\ngovernment about the matter, but the latter had gave little, if
\nany, response, while the stakeholders of the industry had been
\nfocusing their thoughts on different matters.<\/p>\n
GIAT's data shows that Indonesia now has to pay 9.3 percent
\nand 17.5 percent import duties for textiles and apparel
\nrespectively to enter the U.S. market, while Thailand only pays 9
\npercent and 13.7 percent.<\/p>\n
Meanwhile, China, which is expected to expand its domination
\nin the world's textile market once the quota system is lifted,
\nnow pays a more competitive tariff rate of 12 percent for its
\napparel.<\/p>\n
Thailand is now seeking to further cut the tariff under the
\nfree trade agreement (FTA) with the U.S., which is now being
\nnegotiated. Meanwhile, Mexico is negotiating for a zero tariff
\nunder the North America Free Trade Area (NAFTA).<\/p>\n
GIAT estimates 45 percent of Indonesia's textile and textile
\nproducts are at a high risk of being negatively affected by the
\nquota abolition and 20 percent at medium risk.<\/p>\n
James further said that the success of Indonesia in luring
\ntextile investors or in keeping the current producers in the
\ncountry would depend, among other things, on Indonesia's access
\nto the market. Given this, it is important for Indonesia to
\nnegotiate for the lower tariffs to enter the U.S. market.<\/p>\n
The industry, which absorbs 1.2 million workers, was the
\nsecond-largest contributor of foreign exchange earnings among
\nnon-oil and gas industries last year, after the electronics
\nindustry, with an export value of $7.03 billion or 16.22 percent
\nof total non-oil and gas exports last year.<\/p>\n
Textile and apparel exports to the U.S. meanwhile, reached
\n$2.5 billion or 33 percent of Indonesia's total export to the
\nU.S. in 2002.<\/p>\n
The government has long voiced concerns over the situation in
\nthe nation's textile industry, which has been fighting hard to
\ncompete with new suppliers at home and abroad. However, the
\ngovernment's programs have thus far focused on how to provide the
\nindustry access to banking loans so that they can rejuvenate
\ntheir machinery.<\/p>\n
U.S. trade-weighted tariffs
\non textiles and apparel 2001<\/p>\n
Country Textiles Apparel<\/p>\n
(%) (%)
\nIndonesia 9.3 17.5
\nBangladesh na 15.5
\nPakistan 7.8 15.8
\nSri Lanka 9.1 16.2
\nMalaysia 9.3 11.1
\nThailand 9.0 13.7
\nMauritius 6.3 14.8
\nMexico 1.3 1.3
\nChina na 12.0<\/p>\n
na: not available<\/p>\n
Source: USITC 2004, OECD 1996<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indonesia-textiles-risk-tariff-barriers-in-us-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }