Textile producers need to improve efficiency: Association

The Jakarta Post, Nusa Dua, Bali

The Indonesian Textile Association (API)'s head of international relations, Sunjoto Tanudjaja, said that the planned termination of the current textile quota system next year would not seriously damage the country's textile exports as international markets were set to expand with the introduction of the policy.

He explained that only around 20 percent of the country's textile exports, which are expected to reach around $8 billion this year, would be affected by the quota elimination. The country's total textile production is valued at more than $15 billion.

But according to an estimate from the European Union, the global market for textiles and garment products is projected to increase to around $400 billion in 2005 from $350 billion this year once the quota system is ended.

He said that the quota elimination was actually in line with the demand of the association, which for years had been consistently seeking greater market access for the country's textile products.

He said on Sunday that in order for the local players to take advantage of the growing market, the local textile industry must improve its competitiveness.

"The government must help by improving the investment climate here," he told reporters on the sidelines of an industry dialogue held at the ASEAN business and investment summit.

He pointed out that the government must quickly complete the new investment law, amend the labor law, accelerate tax reform and take other necessary measures to improve the unfavorable business climate.

The U.S., Europe, and Canada decided in May to end the current textile quota system at the end of next year to meet a World Trade Organization ruling.

Textile producers from developing countries have been able to continue exporting despite rising competition because of the quota system. When the system ends, inefficient producers, which have benefited from the quota system, will be sidelined.