Economist: Prabowo-Trump trade agreement will not harm national industry
Jakarta (ANTARA) - Economist Salamuddin Daeng believes that the trade agreement between President Prabowo Subianto and US President Donald Trump, through the Agreement on Reciprocal Trade (ART) between Indonesia and the United States, will not harm the national industry.
In a statement in Jakarta on Wednesday, Salamuddin said that such trade agreements are not something new for the government.
According to him, Indonesia has also signed and ratified similar agreements on several occasions at the regional level to broadly, comprehensively, and fundamentally liberalise the regional market, such as the ASEAN Free Trade Agreement (AFTA), followed by the ASEAN-China Free Trade Agreement (ACFTA).
“If you look at it, Indonesia has long been involved in binding international multilateral trade agreements such as the World Trade Organization (WTO),” he said.
According to him, the Prabowo-Trump agreement is simply a continuation of the GATT 1994 agreement as stated in the agreement’s considerations. Trump, he said, wants to take the same opportunity that China and the European Union (EU) have taken to enter large markets such as Indonesia.
Conversely, he said, Prabowo also wants to take the opportunity to enter the large American market with our national industrial products.
He also believes that the Prabowo-Trump agreement is a better agreement because it is done bilaterally. According to him, an agreement involving only two countries makes it possible to review or renegotiate it if it is detrimental.
“This is different from regional agreements such as AFTA, AC-FTA and multilateral agreements such as WTO, which are difficult to renegotiate because they are legally binding and involve many countries,” he said.
In addition, he believes that the Prabowo-Trump trade agreement is also better because it does not have a detrimental impact on national industrial products and SMEs. Compared to the impact of the AFTA and AC-FTA agreements, he said, a number of studies have noted that these agreements have harmed national industry and SMEs.
“We appreciate the Prabowo-Trump trade agreement because it truly considers not placing Indonesian national industrial products in direct competition with products from the United States, either in the American market or in the Indonesian market,” he said.
In the future, he said, Indonesia can take advantage of the Prabowo-Trump agreement to export products that do not compete directly, such as textiles, furniture products, rubber and other SME products, which are subject to zero tariffs.
“This agreement gives us a great opportunity to increase trade in commodities that have been rejected or have strict requirements in other markets, such as palm oil, which is rejected in the European Union market,” he said.