Textile makers seek help as quota set to end

Textile makers seek help as quota set to end

Adianto P. Simamora, The Jakarta Post, Jakarta

The country's textile and garment industry will still be able to
secure its overseas markets when the current quota system set by
the U.S. and Europe will be eliminated by the end of 2004, the
Indonesian Textile Association (API) said.

API, however, urged the government to help the industry boost
its competitiveness particularly in competing with producers from
China and India.

"The government needs to take immediately action," API's head
of international relations and foreign trade Sunjoto Tanudjaja
said in a press statement issued late last week.

Sunjoto did not provide details on what kind of policies the
government were recommended to formulate.

Industry players, however, have long complained about the
massive inflow of cheaper imported products from China and India
which is threatening the existence of local textile and garment
manufacturers. Chinese textilemakers receive a subsidy facility
from their government.

The unfavorable business climate at home, rising production
costs, lack of trade financing facility, and illegal fees have
also created difficulties for local manufacturers. Bank loans are
needed to finance the purchase of new machinery.

Textile producers from developing countries have been able to
make exports despite rising competition because of the quota
system introduced by the U.S., Europe and Canada.

But at last week's meeting of trade ministers in Brussels, it
was agreed that the quota system would be eliminated by the end
of 2004 as required under the World Trade Organization ruling.

Once this happens, Indonesia's textile and garment producers
must compete with manufacturers from other countries in entering
the U.S. and other markets.

Sunjoto, who is also the president of garmentmaker PT Great
River International, was optimistic that local producers could
still compete with those from Vietnam or Bangladesh, but
acknowledged that competition with China would be tough.

Textiles are one of Indonesia's main non-oil and gas export
products.

Indonesia booked a record $8.2 billion in textile exports in
2000, but slipped to $7.6 billion in 2001. Textile exports were
only $6.8 billion in 2002.

Sunjoto said that local textilemakers must start seeking
markets other than the U.S. to help cushion the impact of the
quota elimination.