House supports call for AFTA delay

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)