House supports call for AFTA delay
JAKARTA (JP): The Indonesian Chamber of Commerce and Industry (Kadin) received support on Monday from the House of Representatives (DPR) for its call to delay the country's participation in the ASEAN Free Trade Area.
Kadin's chairman Aburizal Bakri said House members agreed with the chamber's call on the need to reschedule the full implementation of the free trade pact to at least 2005 from the initial schedule of 2003.
He said that the Indonesian economy which is now in the process of recovery still needed more time to be able to compete in the free trade arrangement.
"We have to be honest. If we are not ready why should we force ourselves to join AFTA," Ical, as he is more popularly called, said after a meeting with House Commission V which deals with industry and trade affairs.
AFTA is a free trade pact among the 10 member countries of the Association of South East Asian Nations (ASEAN), comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Under AFTA, ASEAN countries have already reduced import tariffs on various products by a maximum of 20 percent by the year 2000 which will be further slashed to between zero and five percent by 2003. The tariff reduction will provide almost no barrier for the flow of products and services to and from each ASEAN member countries.
In July last year, the National Business Development Council (DPUN) chairman Sofyan Wanandi also called on the Association of Southeast Asian Nations (ASEAN) to delay the free trade agreement as most member countries are not yet ready to enter an open and competitive business environment.
He recommended delaying the implementation of AFTA until 2010 from the schedule of 2003 in a bid to give member countries more time to prepare their economies.
Ical said Indonesia, like Malaysia and Thailand, should also be allowed to be exempted from the trade deal. The regional grouping has already approved Malaysia's special request to maintain protective tariffs on automobile imports until 2005 in a bid to protect its national car program
"Why does Indonesia not conduct a similar measure (to protect the economy), he said, adding that Thailand had also proposed an exemption to protect its agriculture.
"We have proposed this recommendation to President Abdurrahman Wahid but we got no serious response," Ical said.
According to Ical, out from Indonesia's 14 strategic economic sectors, only the forestry sector was considered ready for the free trade agreement.
Ical said the House's Commission V has agreed to further discuss the trade chamber's proposal to related government agencies and in particular to the Coordinating Minister for the Economy. (03)