Industry balks at ASEAN-China FTA

Industry balks at ASEAN-China FTA

Zakki P. Hakim, The Jakarta Post, Jakarta

Industry players are generally the most affected stakeholders in
any free trade agreement (FTA), but they continually feel they
are being left out of the FTA negotiation process.

The implementation of the FTA between China and ASEAN nations
-- which would see almost all import duties slashed starting on
Wednesday and gradually dropping to zero by 2010 -- is the latest
example.

Indonesian Electronics Producers Association (Gabel) chairman
Rachmat Gobel said the involvement of industry players in the
negotiations had been minimal.

"If the government says it involved industry players in the
process, most of them would ask, which ones?" he told The Jakarta
Post on Tuesday.

He acknowledged that the current government was more proactive
in involving the private sector, although they could still do
better.

Rachmat said most industry players here were still clueless on
the government's plan for the private sector in facing the trade
liberalization drive.

"We expect to see a concrete plan. Until there is one, we will
still use our own plans and assumptions as to which markets and
products we will be developing," he said.

Indonesian Textile Association (API) chairman Benny Sutrisno
said the Ministry of Trade should communicate the results of the
FTA, and suggest ways of anticipating the impacts of ASEAN-China
FTA to the private sector as soon as possible.

"Most industry players have no idea about the ASEAN-China FTA.
Without proper knowledge, how can they make the right business
decisions?" he told the Post.

He said that industry had no choice but to be ready to face
the ASEAN-China FTA. However, it would be helpful if the
government provided clear guidelines of what each sector had to
do each year before the actual liberalization in 2010.

Benny further implied that the textile industry players were
mostly still in the dark about the negotiations that led to the
signing of a "Framework Agreement on Comprehensive Economic
Cooperation between ASEAN and China" on Nov. 4, 2002 in Phnom
Penh.

His claims, however, were contradicted by the trade ministry
who said that every commitment in the FTA was only made based
upon input from the private sector.

Benny suggested that the ministry needed to find more creative
and effective ways to communicate with the private sector.

Also, he said the government should have protected the textile
industry as it provides a massive number of jobs.

The ministry said that it had always accommodated input from
the private sector, including those sectors targeted for
liberalization.

On Wednesday, the government will start slashing tariffs by 85
percent on 5,255 groups of goods (HS 6 digits) traded between
ASEAN and China, but secured 304 tariff categories of goods on a
"sensitive" list, and 47 categories on the "highly-sensitive"
list.

The "sensitive" group of goods, includes, but is not limited
to, certain sub-sectors of the textile industry and the
electronics industry. Tariff cuts for this group would only start
in 2012, reaching zero in 2020.

The ministry said that several industry players had to learn
the hard way that they had lost markets in China to other ASEAN
countries as a consequence of not opening up the domestic market.