Local industries should be prepared for FTA: Experts<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
Experts called on the government on Friday to take measures to
\nhelp boost the competitiveness of local industries before going
\nahead with its plan to sign a free trade agreement (FTA) with the
\nUnited States.<\/p>\n
Sri Adiningsih, an economist at Gadjah Mada University in
\nYogyakarta, said an FTA with the U.S. would not benefit local
\nindustries very much as most of them were not ready to compete in
\ntrade, citing that many local products had not only failed to
\ncompete on foreign markets, but also on local markets.<\/p>\n
Sri acknowledged that bilateral FTAs had become a trend, but
\nsaid Indonesia did not need to follow the trend.<\/p>\n
\"It would be better for the government to boost the
\ncompetitiveness of local industries than just follow the trend to
\ncreate an FTA,\" Sri told The Jakarta Post on Friday.<\/p>\n
\"Freeing up the market is a very sensitive issue. The
\ngovernment should first ask many parties, including business
\nplayers, whether the country is ready for free competition,\" she
\nadded.<\/p>\n
Minister of Industry and Trade Rini M. Soewandi and U.S. Trade
\nRepresentative Robert Zoellick were in Bali on Thursday to
\ndiscuss the likelihood of an FTA.<\/p>\n
The U.S. is seeking bilateral deals with each of the
\nAssociation of Southeast Asian Nations (ASEAN) members rather
\nthan regional cooperation as a whole.<\/p>\n
The U.S. is Indonesia's biggest export market, accounting for
\naround 16 percent of total export sales.<\/p>\n
Indonesia's main exports to the U.S. are garments, textiles,
\nfootwear and shellfish. While the country's imports consist
\nmainly of agricultural products like cotton, wheat and maize.<\/p>\n
American agricultural products remain tightly protected by
\nboth taxes and subsidies, and enable producers to sell their
\nproducts cheaper in the country.<\/p>\n
Soy Pardede, an executive at the Indonesian Chamber of
\nCommerce and Industry (Kadin), said that the government should
\nfirst conduct a study on the real conditions of local industries
\nbefore pushing through its plan to sign an FTA.<\/p>\n
Should the government decide to pursue the plan, Indonesia
\nshould be tough in its negotiations, he said.<\/p>\n
\"The government must ensure that Indonesia will not end up
\nonly serving as a market for the U.S.,\" Soy told the Post.<\/p>\n
Soy also warned that the move by the U.S. to sign FTAs with
\neach ASEAN member country, rather than with the region as a
\nwhole, could threaten the ASEAN Free Trade Area (Afta) as it
\nwould encourage ASEAN members to think about their respective
\ninterests rather than the interests of the whole region.<\/p>\n
\"This is a bad sign for ASEAN. This is also strong evidence
\nthat there is no longer synergy among ASEAN member countries,\"
\nSoy said.<\/p>\n
He, however, acknowledged that Indonesia had no alternative
\nbut to go ahead with the FTA plan given the fact other ASEAN
\ncountries intended to sign deals. Otherwise, Indonesia could lag
\nbehind other ASEAN countries in taking the potential benefits of
\nan FTA.<\/p>\n
\"We have no choice. The Indonesia government must follow up on
\nthe FTA plan as other ASEAN countries plan to (sign FTA deals),\"
\nhe said.<\/p>\n
ASEAN comprises Indonesia, Singapore, the Philippines,
\nMalaysia, Brunei, Thailand, Laos, Cambodia, Myammar and Vietnam.<\/p>\n
The U.S. is close to signing its first bilateral FTA with
\nSingapore.<\/p>\n
Earlier this month, ASEAN agreed to create a historic FTA with
\nChina that come into effect in 2010. Japan, which has signed a
\nbilateral FTA with Singapore, also plans to sign an FTA with
\nASEAN.<\/p>\n
Indonesia has also proposed signing a bilateral FTA with
\nJapan.<\/p>",
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