Producers not waiting for other shoe to drop on Asian dumping
Producers not waiting for other shoe to drop on Asian dumping
JAKARTA (JP): The Indonesian Footwear Manufacturers
Association (Aprisindo) are drawing the battle lines to defend
their foreign market share.
Aprisindo Chairman Franky Welirang told a press conference
yesterday that new marketing efforts will be one of the issues to
be discussed at the association's conference on Tuesday.
He said that proactive steps, such as strong lobbies and
better-organized promotions overseas, are urgently needed since
Indonesia is a newcomer to the international footwear market.
"Our industry started to develop only in the mid 1980's and
began to play an important role on the international market over
the last five years," he said.
Franky said the high increase in Indonesian exports has caused
domestic producers in several importing countries to call for
protectionist measures.
New import restrictions were imposed on leading footwear
exporters last year, especially those from the Asia Pacific
region, and manufacturers of brand name products were advised to
relocate their factories in this region to other areas such as
Mexico and Europe, he said.
Franky said the Mexican government last year placed
restrictions on imports from China in retaliation for that
nation's trade practices, which the Mexican's claim include
dumping.
Dumping is the practice of selling a product in a foreign
market below cost, in order to drive local competition out of
existence.
Franky is afraid that Indonesia and other low-cost footwear
producers will encounter similar import restrictions in Mexico.
He said the punitive tariffs slapped by Mexico on Chinese
products were as high as 1,150 percent.
Duties
The association of footwear manufacturers of the European
Union (EU) has also proposed heavy duties be imposed on Chinese,
Thai and Indonesian footwear exports.
He said the EU would likely recommend investigations into
dumping by these three countries.
He explained that Argentina has imposed new tariffs for all
imported footwear products and Brazil may consider restricting
the volume of imports.
Canada has levied an anti-dumping penalty on products from
China and Taiwan, which may be followed by a similar fine on
other countries including Indonesia.
"We have to prevent these threats from happening before it is
too late," Franky said.
Indonesia's footwear exports to Canada rose slightly from
US$32.19 million in 1992 to $32.82 million last year. But in
Mexico they doubled from $11.3 million to $26.5 million during
the same period.
In Brazil they rose from $740,000 in 1992 to $5.3 million in
1993, in Argentina from $3 million to $10 million and in Europe
from $428.5 million to $631.2 million.
Franky said the association's meeting will also discuss post-
GATT (General Agreement on Tariffs and Trade) "protectionist"
measures which may be faced by association members, such as
issues related to the environment and human rights.
"We will try to seek new processing techniques to reduce
environmental impacts caused by the chemicals used in our
industry," he said.
However, Franky also sees the new GATT regulations as
conducive for opening the international market. He said Indonesia
currently exports footwear to 108 countries and expects to expand
the export market to 114 countries this year.
Deregulation
"What we urgently need is more deregulation to ease the import
of raw materials for our products," Franky said.
Footwear exports reached $220.38 million in 1989 and rose to
$569.5 million in 1990, $994.08 in 1991, $1.32 billion in 1992
and $1.6 billion last year, making it Indonesia's third largest
export commodity in the non-oil product category.
He said the target for footwear exports this year was $2
billion, or a 30-percent increase from last year's target of $1.5
billion.
There are currently 356 large and medium-scale footwear
factories operating in the country, producing various sports,
leather, industrial shoes, sandals and slippers.
Of this total, 151 are domestic companies with Rp 1.83
trillion in investments and 64 are foreign firms with $409.5
million. The remaining 141 are small-scale and home industries.
The industry produces about 800 million pairs of shoes per
year and employs more than one million workers.(10)