Indonesian textile-export quota increased 29 percent

JAKARTA (JP): Indonesia's textile-export quota will increase by up to 29 percent this year thanks to quota swaps from Singapore, higher quotas from Europe and the exemption of export overshipments last year.

A statement from the Ministry of Industry and Trade yesterday said that discussions between the Indonesian and Singaporean governments last month resulted in a quota swap which allowed Indonesia to export an additional 3.34 million kilograms of sheet-textile and 10.06 million garment pieces to the European Union (EU).

These allocations, or quotas, initially belonged to Singapore.

The statement said the European Commission had also allowed a 2 percent addition to Indonesia's export quota to the EU, which is equivalent to 2.41 million kg of sheet-textile and 2.6 million pieces of garment.

Last year Indonesia gained exemptions from the overshipment of its textile exports, part of which was done without cutting back export quotas for this year.

"As a result, Indonesia's export quota this year will increase by 29 percent from that in 1996, or about a third of Indonesia's total export quota," the statement read.

The Ministry of Industry and Trade distributes export quotas to textile producers who then use them to send exports to the countries that set the quotas.

About 60 percent of exports of textiles and textile-related products are under quota schemes.

Yesterday's statement also said the inter-governmental talks last month concluded that Singapore had no objections to the quota swaps for textile exports to Europe and the United States.

"The Indonesian and Singaporean governments have agreed to allocate these EU quotas to companies that need them," the statement said.

The statement did not disclose what categories of textile export quotas were given to Singapore in the deal.

According to the deal, companies receiving the a quota should use it themselves and not trade it with others.

In recent years, export quotas have been sold regularly by the companies receiving them. Analysts say the high price of the quotas and their uneven distribution by the ministry were among the reasons the country's textile industry had been lagging.

The government has vowed to fine those trading the quotas.

According to the Ministry of Industry and Trade, the value of textile and textile-related exports increased from $5.9 billion in 1992 to $6 billion in 1993 but fell to $5.6 billion in 1994 before recovering to $6.2 billion in 1995 and an estimated $6.8 billion last year.

Yesterday's statement said quota swaps to the U.S. would be discussed further because the issue had not been mentioned in the bilateral agreements between the U.S. and Singapore and between the U.S. and Indonesia.

A three-party meeting between Singapore, Indonesia and the U.S. was scheduled for this month or next month, the statement said.

Singapore, it said, had agreed for the quota swap to the U.S. to be at least of the same amount as that to the EU, or about 10 percent of Indonesia's total textile export quota.

"The quota swap, overshipment exemptions and additional export quotas will improve the export performance of Indonesia's textile and textile-related products -- both in terms of volume and value -- to an extent that has never been achieved before," the statement read. (pwn)