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Indonesia to Deal with India FTA
The agreements do not have any potential to threaten domestic industry.
Selasa, 5 Januari 2010, 12:36 WIB
Arinto Tri Wibowo, Elly Setyo Rini 
(deptan.go.id)
VIVAnews - After dealing with the polemic sparked by the ASEAN-China free trade agreement (FTA) with thousands of manufactured product tariff posts becoming 0 percent starting January 1, 2010, Indonesia also faces ASEAN-India and ASEAN-Australia-New Zealand FTAs.
The application of the FTAs infuriated domestic industry because it would lead to the loss of local products in competing against Chinese imported products.
Through the ASEAN-India FTA, more than 80 percent of tariff posts will be liberated, including special products like crude palm oil (CPO), coffee, tea and pepper.
Around 4000 tariff posts will be gradually eliminated from 2012 until 2016. Tariffs for sensitive products would decrease until five percent in 2016 and 489 tariff posts for overly-sensitive products will be following.
Industry Minister MS Hidayat assumes the agreements do not have any potential to threaten domestic industry, just like the ASEAN-China FTA.
“With India, we’re still on top and the trade balance will still be positive,” Hidayat said after a press conference at the office of Coordinating Minister for Economy in Jakarta on Monday, January 4, 2010.
Unlike China who has been taking on the market with its mass production, India’s power lies within its technology and information sector. The country is also facing challenges that are similar to the ones in Indonesia which one of them occurs in banking sector.
According to Hidayat, ASEAN countries will not be threatened by the invasion of low-price products due to the implementation of ASEAN-India FTA.
The trade in goods (TIG), which is the first stage of ASEAN-India FTA, has taken into effect on January 1, 2010 after going through a six-year-long negotiation.
In 2008, the trade balance of ASEAN countries and India reached US$ 47 billion in which Indonesia ranked third below Singapore and Malaysia.
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Translated by: Nataya Ermanti
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