Govt told to put brakes on Chinese garment imports

Zakki P. Hakim, The Jakarta Post, Jakarta

Concerned with the massive surge in garment imports from China, local manufacturers are urging the government impose measures that would prevent it from damaging the industry, the Indonesian Textile Association (API) says.

"We are not asking for the government to stop the imports, but they could have been increased the tariff wall," API vice chairman Ade Sudrajat said on Tuesday on the sidelines of a workshop entitled Formulating a Strategic Development Position ahead of the WTO 6th Ministerial Meeting.

He went on to add that API requested a couple of months ago that the government increase import duties for garments from the average of 20 percent currently to 25 percent.

The government however, turned down the request, he said.

In the first quarter of the year, garment imports from China increased ten-fold to US$4.27 million from the same period last year, Ade said during the two-day workshop, which ended on Tuesday.

The import data, based on reports from the Central Statistics Agency (BPS), also showed that total garment imports rose 296 percent in the January to March period this year from the corresponding period last year.

Meanwhile, garment imports from Hong Kong rose 229 percent, Singapore 202 percent and Malaysia 184 percent, he said.

Ade suspected that the surging imports were part of China's move to find alternative ways to enter the U.S. market, as the latter had limited Chinese garment exports using the so-called "Textile Specific Safeguard" measures until 2008.

He added that while Indonesia was experiencing a surge in garment imports, it also recorded a 10 percent increase of the commodity's exports to the U.S. in the first five months of the year compared to the same period last year.

He continued by explaining that the increase in the exports was suspicious as it was taking place when at least 77 textile manufacturers had stopped operating. They stopped last month.

"We are studying the case, before we submit a formal request for trade measures," he replied when asked whether or not API would submit a petition for trade remedy measures such as anti- dumping rules or other safeguards.

Separately, Indonesian Ambassador to the WTO Gusmardi Bustami said that API had to file a formal petition for the government to impose trade remedy measures.

Such a petition would require API to provide a complete data proving that the surge in imports had caused damage to the local industry.

On the transshipment suspicions, it was the U.S. that should file the complaint and prove that such a practice had taken place, he said.

Despite the banking sector perception that the local textile and clothing sector is a sunset industry, its exports remain the country's top performer -- as compared to other non-oil and gas commodities -- with last year the value reaching $7.64 billion, compared to the previous year's $7.03 billion.