Indonesian businesses ask for delaying FTA with India

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JAKARTA, May 12 (Xinhua) -- Indonesia's business associations asked the government to delay the implementation of ASEAN-India Free Trade Agreement (AIFTA) in the country scheduled to take in to effect on June 1 this year due to various reasons, local media reported on Wednesday.

Indonesian Employers Association (Apindo) Chairman Sofyan Wanandi said that all trade cooperation, including the AIFTA, should be delayed so as to give national industry chance to develop and improve its condition amid the uncompetitive restraints in some of its sectors.

Even realizing that the AIFTA would benefit some sectors, Sofyan pointed out the need to scrutinize the agreement schemes and undertake further study in a bid to avoid losses that would possibly be suffered by domestic industry.

"We should be talking about the long term, not only the short term goals. So we have to be really careful in scrutinizing all the FTA we are about to set up with," Sofyan was quoted by the Bisnis Indonesia daily as saying.

Meanwhile, Indonesia plastic and olefin producer association ( Inaplas) deputy chairman Budi Susanto Sadiman said that the implementation of AIFTA may threat domestic petrochemical industry since production of India's petrochemical industry has reached 10 million ton per annum, while Indonesia is at 2 million ton per annum.

Indonesia Exporters Association (GPEI) Secretary General Toto Dirgantoro said that FTA with India should not be merely considered on the terms of payment surplus in Indonesia-India trade.

He said that it should also be considered on the production competitiveness of commodities included in the FTA's import tariff deletion scheme.

According to the data issued by the trade ministry, Indonesia saw a 2.68 billion U.S. dollars of surplus in its trade with India in the first half last year. That figure was 67.27 percent higher than it was in the corresponding period in 2008.

International Trade Cooperation Director General at the Indonesian Foreign Affairs Ministry Gusmardi Bustami said that Indonesia would settle the AIFTA ratification in the near future so as to make Indonesia ready to implement the AIFTA along with other ASEAN members on June 1.

Malaysia, Brunei Darussalam, Thailand and India have already implemented the AIFTA earlier on January this year.

ASEAN Economic Community Secretary General Pushpanathan said earlier that AIFTA market would constitute 1.8 billion people in the two economies with combined Gross Domestic Product (GDP) at 2. 75 trillion U.S. dollars.

XINHUA/Indonesian businesses ask for delaying FTA with India