The Indonesian Industry Ministry has agreed to reassess the costs and benefits of the China-ASEAN free trade agreement, and may even propose a postponement. Textile producers from Indonesia argue that full implementation of the agreement next January, which is expected to end to all import tariffs, would amplify the already unbearable pressure from the influx of Chinese goods.

The Indonesian Textile Producers Association (API) explained that local producers are not ready to compete against their Chinese counterparts, should the FTA’s implementation goes ahead as scheduled. Chinese producers are leveraged by government subsidies, creating unfair global business competition. Recognizing the reality, the Industry Ministry is planning joint study with corresponding bodies in other ASEAN countries on the impact of the FTA specifically on the domestic textile industry, said Ansari Bukhari, the Industry Ministry’s Director General for metal, textile, machinery and miscellaneous industries. ASEAN comprises of Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Burma, Cambodia, Laos and Vietnam.

API Deputy Chairman Ade Sudrajat suggested that prior to opening up its markets to China; ASEAN countries should try to improve trade within the region. Textile and garment trade between ASEAN members is still small, accounting for only 7% of the US$29.6 billion recorded in 2008 for total textile and garment exports from the region and we need to boost this to at least 20% before moving forward with an FTA.