Will AFTA bring us nothing but good?

Tantri Yuliandini, The Jakarta Post, Jakarta

With none of the splashy fanfare that marked the debut of the euro, the ASEAN Free Trade Area scheme (AFTA) commenced on the first day of this year.

Many of us, like Mirah Maharani, a trainer at Pelopor Adventure Camp, an outdoor human resource training operator, did not even know about it.

"I always thought it was to be in 2003 -- wasn't all the hype for 2003?" she said.

Under the first terms to take effect, imported products from other member countries of the Association of Southeast Asian Nations are set to become easily available in Indonesia (the scheme will have a staggered implementation in several other nations). Other AFTA stipulations, including those governing services and employment, will come later, pending changes in regulations.

Its first impact will be felt in the marketplace.

Because the AFTA scheme requires member countries to lower all but a few of their import tariffs from zero percent to 5 percent by the end of the year, imported goods will no longer carry the high price tags they had in the past.

Lower prices and a wider range of product choice should benefit the public in the long run, at least in theory.

However, chairwoman of the Indonesian Consumer Foundation (YLKI) Indah Suksmaningsih saw things differently.

"It (AFTA) will be beneficial to the public only if the freedom of trade is balanced by a fair disputes settlement system for consumers," she told The Jakarta Post.

Indah pointed out that while the AFTA scheme outlined in detail the benefit of free trade for corporations across the region, it failed to address the importance of consumer protection.

"Where do consumers go to complain about defective goods from Malaysia, for example?" she queried, adding that a consumer foundation at the international level was needed to mediate disputes between producers and their international consumers.

Indah also criticized the government's inclination to put the interests of producers above those of consumers, citing slowness in establishing an official consumer disputes settlement body, which had been promised in the 1999 consumer protection law.

"It's always the one with the money who wins, and consumers are positioned at the weaker end," she said, reasoning that a government body's main job was to fight for the rights of the people.

A reliable source of information on new products was also another reason for the establishment of an official consumer disputes settlement body, Indah said, explaining that without proper information consumers could be cheated into buying low- quality goods.

"Without being patronizing, the body could, for example, compare the different brands of detergent, their pluses and minuses, so that consumers could make up their own minds which was the better product for them," she said.

In the meantime, public ignorance of AFTA continues to predominate. Many did not realize that the implementation of the free trade area had been brought forward to this year, instead of 2003 initially, and many others only found out recently through the media.

As for the likelihood of a wider variety of goods, possibly at cheaper prices, Mirah said she would be happy with the choice. However, she acknowledged the danger to local businesses.

"We (Indonesians) view foreign products as better than our own," Mirah said, underlining the danger to the prosperity of local factories and their workers.

Indeed, the Indonesian Chamber of Commerce and Industry (Kadin) recently disclosed that about 27 percent of local products were not ready for free competition.

The Association of Indonesian Textile Producers (API) even predicted that, with the current global economic downturn, more than 100,000 jobs could be shed within the year.

"If the corporations say they aren't ready, then the workers are in trouble," Dita Indah Sari of the Indonesian National Front for Labor Struggle (FNBI) said, adding that already some 8,500 workers had lost their jobs within the last two months to three months in Tangerang and Bandung, West Java.

"And that's before the AFTA scheme was fully operational," she said.

Dita said that Indonesia's preparations for free trade had been at a high cost to its people, including the gradual elimination of various subsidies such as for fuel and electricity.

"The reason why the government wants to do away with subsidies is because other countries won't accept competition from cheaper subsidized products," she said.

"Obviously, it (the government) is more concerned about the country's global position than the welfare of its people".