Wed, 14 Apr 2010

From: The Jakarta Post

By P.M. Erza Killian, Malang
The Indonesian government’s failure to renegotiate the ASEAN-China Free Trade Area (ACFTA) this week was seen by many as a major threat to many Indonesian producers. China’s refusal to renegotiate the 228 tariff posts proposed by Indonesia raised concern among not only producers but among bureaucrats as well.

One of the results of the renegotiation process is the willingness of China to provide a few “safeguard” measures, should there be a negative impact of ACFTA on Indonesian local producers.

However, this result has been deemed not good enough by Indonesia’s Industry Minister, M.S. Hidayat, since its mechanism is still unclear (The Jakarta Post, April 7, 2010). Hidayat has also expressed disappointment in the fact that he was excluded from discussions prior to the renegotiation process.

Hidayat’s disappointment can be fully understood in the sense that it’s pretty insensible to renegotiate free trade agreement without consulting the government office directly affected by the decision.

It is even more insensible to negotiate or renegotiate a free trade agreement without consulting nor considering the political affects of the free trade agreement in the first place.

There have certainly been many flaws in the initial ACFTA negotiations, but the biggest one is perhaps failing to recognize the political consequences it will bring for Indonesia. Almost all debates regarding ACFTA in Indonesia revolves around its economic consequences and safeguard measures, neglecting the political elements of the debate. It certainly is an over simplification of the issue since free trade is as much a political game as it is an economic game.

Indonesia, however, has never been fully interested in discussing the political side of ACFTA negotiations and perhaps, other free trade negotiations. Commentators of free trade in Indonesia were mostly dominated by economists, with only few if any, (global) political economists (GPEs) in the debate.

The exclusion of GPE scholars is not only apparent in the current popular debate, but also in the formulation and negotiation processes of free trade in Indonesia.

This is certainly not to claim that the current negotiators lack political capabilities, but the involvement and inclusion of some GPE scholars certainly might help in the negotiation process.

China, for example, sees the current free trade agreement with ASEAN not just as an economic partnership, but also as a vehicle for its power expansion in Southeast Asia, since it is currently in a dispute over Asian leadership claims between India and Japan.

However, China is still facing difficulties penetrating the region, since ASEAN is still seen as the one who is “sitting in the driving seat” (Westad, 2010).

Indonesia, then, should have certain advantages in negotiations if this background information was taken into consideration by negotiators, then perhaps we could expect a different result.

However, all the fault cannot be fully blamed on the actors directly involved. Yet, it is useful to see how the popular media and public discourse in Indonesia is shaping the current debate over free trade negotiations.

Discourse in this sense, will not be limited to only the choice of language, but will include the spread of ideas, beliefs and information throughout the country.

Dialogs and commentators are the most common features of public discourse regarding free trade in Indonesia. Daily news frequently broadcasts opinions from experts and practitioners of free trade which is mostly dominated by economists.

Hence, the result is a widespread belief that free trade in Indonesia is mostly an economic issue and should only receive economic “treatment”. Rarely do we see an expert in Indonesia covering both the political and economic argument of free trade despite the vast literature regarding the political aspects of free trade.

As one can expect, the result is a favoritism toward economic argument, neglecting the political argument of free trade, which in turn causes the larger community to also favor a certain viewpoint. As a result, policymakers are influenced by this “leaning” toward economics, again causing an economic approach to free trade issues.

It is therefore, pretty unfair to lay all the blame for the failure of free trade negotiations/renegotiations on policymakers and government agents, while people’s preference, ideas and actions also influence
the government’s decision, albeit indirectly.

If only the popular discourse in Indonesian community highlighted the political argument for free trade then maybe we would see a different result regarding free trade in Indonesia.

In a classic piece of work by notable GPE scholar Susan Strange, the case of “mutual neglect” between the study of International Relations and International Economics was the reason why global political economics was created seeing as politics and economics are rarely separable. Ironically, the case of mutual neglect is perhaps what is happening in the current debate of free trade in Indonesia.

This is not to underestimate the role of economic analysis in free trade, but merely an effort to balance the public discourse on free trade in Indonesia.

Perhaps it is time for us to see commentators from both economics and politics team up to give a broad and comprehensive analysis of free trade to the public.

Then maybe, we can expect a change in the government’s perspective and policy regarding free trade.

It is pretty unfair to lay all the blame for the failure of free trade negotiations on policymakers and government agents.

The writer is a lecturer at the Department of International Relations, Brawijaya University, Malang.