Manufacturing sector faces no problem with free trade
Manufacturing sector faces no problem with free trade
JAKARTA (JP): Minister of Industry Tunky Ariwibowo stated
yesterday that Indonesia's manufacturing industry will face no
problems with the APEC trade liberalization.
"We still have much time and our manufacturing industry is
experienced enough," the minister said of the decision of the
Asia and Pacific Economic Cooperation (APEC) forum in Bogor
yesterday afternoon to liberalize trade among members.
Speaking to newsmen after addressing the APEC Business Forum,
the minister said the government has given strong emphasis to the
development of intermediary industries in a bid to further
support the manufacturing sector.
"We hope the manufacturing sector will be efficient enough
when the free trade arrangement is fully implemented," he said.
APEC leaders decided at a one-day forum yesterday to
liberalize trade in the Asian and Pacific area by no later than
2010 for advanced member economies and by 2020 for developing
members.
Tunky acknowledged that the government's bureaucracy and
outdated regulations still hamper a cost efficiency program but
he promised such shortcomings would be further minimized.
The minister said the different levels of members' economies
will strongly influence the 18-member organization to cooperate
in resources, technology and labor factors.
Tunky said that APEC's developed and newly industrialized
members could benefit from the cheap labor and resources of the
developing members, which will, in turn, receive capital and more
advanced technology from their developed partners.
Trade barrier
In his speech at the business forum, held concurrently with
the APEC meeting, Tunky said many developed countries impose a
wide range of non-tariff barriers, such as stringent technical
standards and the adoption of quota systems to prevent the entry
of goods from developing nations onto their markets.
He said that such non-tariff barriers should be removed. Such
practices would hurt both sides because the drop in developing
countries' exports would also reduce their capability to import
from industrialized countries.
"Export per se is not the objective of the developing
nations," he said, adding that most developing countries use
their export earnings to buy products and services from developed
nations in order to sustain their economic growth and to improve
their living standards.
Developing countries' exports will, therefore, neither
displace the domestic production of developed nations nor cause
further unemployment as many economists fear, he argued.
"A recent study by Professor Robert Lawrence of Harvard shows
that the bulk of developed nations' trade is with countries whose
populace earn similar wages," Tunky said to back up his argument.
The minister said that the reason for the unemployment rate in
developed nations increasing could lie elsewhere, "perhaps in the
technological changes or skill shifts as these nations make the
transition from an industrial era to an information era."
(rid/hen)