House members wary of APEC moving too fast

By Pandaya

JAKARTA (JP): A number of Indonesian legislators are warning the government against pushing the idea of a free trade area in the Asia Pacific area, pointing out that the nation needs to do some housekeeping first. The idea is being considered by the Asia-Pacific Economic Cooperation (APEC) forum.

Interviewed separately, three members of the House of Representatives (DPR) suggested that Indonesia, which currently chairs the 18-member forum, maintain APEC as a loose consultative forum.

They suggest Indonesia strengthen its economy and supporting institutions instead of hastily setting a target date for an APEC free trade area.

The warning came on the eve of the annual APEC ministerial meeting which will review proposals for trade liberalization in the Asia Pacific and the possibility of establishing a free trade area.

The APEC Eminent Persons Group has even suggested a deadline of 2020 if not earlier.

While they welcome Indonesia's participation in the 18-member APEC, legislators Aisyah Aminy, Tadjuddin Noer Said and Bomer Pasaribu said that until the economy was solid enough to compete in the world market, Indonesia should oppose the proposal.

"Indonesia should tread carefully because industrial countries like the United States has a strong vested interest in APEC," Aisyah said. "Washington may use the forum to strengthen its bargaining position against the European Union."

Aisyah, who chairs the DPR Commission I on foreign affairs, said Indonesia should not be spellbound by industrialized countries' rhetorics on the need for regional free trade.

"If the regional free trade deadline is set too soon, Indonesia's economy may collapse," said the legislator from the Moslem-based United Development Party (PPP).

"In a way, Indonesia's participation in APEC would encourage local businesses to improve their efficiency and competitiveness in the world market instead of just counting on the privileges and protection from the government," she added.

APEC groups the United States, Canada, Mexico, Chile, Japan, South Korea, China, Hong Kong, Chinese Taipei, Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Papua New Guinea, Australia and New Zealand.

Together, the 18 countries account for about half of the world's gross domestic products. The member countries range from budding economies to industrial powerhouses and setting a time frame for full-swing trade liberalization is a difficult issue.

U.S. and Australian officials, who spearheaded APEC, have predicted that free trade would unite the Asia-Pacific region before the 2020 target date.

Any commitment on free trade is likely to come from the APEC Economic Leaders Meeting scheduled in Bogor next Tuesday and not from the ministerial meeting which will open tomorrow in Jakarta.

American President Bill Clinton hosted the first APEC leaders meeting in Seattle last November. Washington believes that consensus is now building for 2020 as the optimum date for achieving regional free trade.

Australia, which first floated the idea of APEC in 1989, is one of the most enthusiastic supporters of the idea to strike a deadline at the Bogor meeting.

Australian Prime Minister Paul Keating will push hard for an ambitious free trade deal at the summit, believing that such a pact can trigger a whole new round of global trade liberalization. He has traveled far and lobbied hard over recent months for a deal to open up trade by a specific date.

Tadjuddin, a House member from the ruling political organization Golkar, questioned whether Indonesian industries would be able to compete in the international market if the government maintained its inward-looking economic policies.

"The hikes in electricity rates, soaring fuel prices, expensive transport fees and rife illegal levies have to be dealt with if the industry is expected to be competitive," he said.

He pointed out that the ongoing disclosure of scandalous export document scams to obtain bank credits involving major companies showed inefficiencies in Indonesia's exports.

"I suggest that Indonesia see to it that APEC remain a consultative forum until the economy reaches a higher level of development," he said.

Employment

For those concerned with employment, like legislator Bomer Pasaribu, APEC is expected to bring about ample employment opportunities for Indonesia.

Bomer envisions that as APEC is being institutionalized skilled foreign investors will stream to Indonesia, creating new jobs and enabling transfer of technology through education and training programs.

Indonesian Minister of Foreign Affairs Ali Alatas has said that APEC has been undergoing an institutionalization process in small stages. Indonesia's task, Alatas said, is to see to it that the process will not go too fast.

"When trade is liberalized, Indonesia will be flooded with professional workers from other countries. And we will have to have legislations on how to make the best use of them," said Bomer, who is also secretary general of the All Indonesian Labor Union (SPSI), the only union the government recognizes.

He maintains that human resources development must obtain top priority in the APEC forum. All foreign ventures should be required to conduct apprenticeship programs for local workers, he said.

Under the existing labor laws, expatriates may be employed only if the job opening cannot be filled by locals.