RI anxious ahead ASEAN-S. Korea talks
RI anxious ahead ASEAN-S. Korea talks
The Jakarta Post, Jakarta
Local industry players warned the government to make sure that
the implementation of the free trade agreement between the
Association of Southeast Asian Nations (ASEAN) and South Korea
was not in conflict with national interests.
The Indonesian Olefin and Plastic Industry Association
(Inaplas) and Indonesian Textile Association (API) reminded the
government on Thursday to be careful with regard to which
products it offered to be liberalized and which would remain
protected in forming the FTA.
"Indonesia's FTA negotiation team should not be too aggressive
and hasty in slashing import duties. The team should first
consult industry players and assess the facts in the field," said
Inaplas chairman Didi Suwondo as quoted by Antara.
API representative Rema Gita Wasisa said Indonesia should not
slash its import tariff too much, as it would make the country
lose its bargaining power in negotiations.
According to Rema, Indonesia exported yarn made of cotton,
polyester and rayon to South Korea, and imported fabrics that
contained nylon and acrylic fiber.
"Therefore, in the coming FTA negotiation with South Korea,
Indonesia should propose to cut the tariff on textile products
containing acrylic and nylon, which are not produced in the
country as the industry needs them," he said.
Both associations were speaking on the sidelines of
Indonesia's Preparation in facing ASEAN-Republic of Korea Free
Trade Area symposium, held by the Ministry of Foreign Affairs.
ASEAN and South Korea will meet next week in Seoul to discuss
a draft of the preferential trade agreement.
Leaders from both sides agreed in the ASEAN Summit in Laos
last November to remove import tariffs from at least 80 percent
of the total groups of products traded by the grouping and South
Korea by 2009.
South Korea is ASEAN's fifth largest trading partner, with
exports from ASEAN reaching US$17.1 billion in 2003, or about 4
percent of ASEAN's total exports.
Meanwhile, ASEAN imports from South Korea stood at $15.1
billion in 2003.
Investment-wise, ASEAN is South Korea's third largest
destination region with a total investment of $11 billion in
2003.
In bilateral trade terms, Indonesia's non-oil and gas exports
to South Korea reached $1.8 billion in 2003, while oil and gas
exports stood at $2.55 billion in the same year.
Local associations have been reluctant to open the domestic
market at the expense of losing the export market.
Early last year, the local oleochemical industry was stunned
to learn that China had applied a lower import duty on Malaysia's
palm oil derivative products as the commodity was not included in
a program that preceded a China-ASEAN FTA implementation.
Officials at the Ministry of Trade, including former Minister
of Industry and Trade Rini MS Soewandi, had said the commodity's
exclusion from the Early Harvest Program (EHP) was decided upon
request from the industry itself.
The industry opted to protect its local market at the expense
of the potential export market to China.
Responding to the industry's complaint, the ministry quickly
lobbied its Chinese counterparts to have stearic acid included in
the EHP. China eventually granted the request and agreed to cut
import duties on Indonesia's stearic acid to the same level
imposed on the Malaysian commodity starting January this year.
Stearic acid is a palm oil derivative used to bind and thicken
lotions and creams, and is also useful in making soaps and
candles harder.