Postponement of Indonesia-Australia FTA Proposed

BANDUNG - Industry Minister MS Hidayat has asked that the Free Trade Agreement (FTA) among Indonesia, Australia and New Zealand should be postponed until after a study of its advantage or disadvantage is finished.

"If an FTA is to be concluded, a list of its advantage and disadvantage must be made first and an intensive discourse with the business world must be held," the minister said here on Saturday.

He said that studies, discourse and clear sectors that were to be affected by the FTA, were very important to avoid the emergence of problems after the agreement was signed.

"It should not happen that the FTA would only benefit Australia while the expected investment does not take place in the country," the industry minister said.

He said that the important thing was the substance of the FTA which should bring benefit to and serve the interest of Indonesia.

The industry minister cited the ASEAN-China Free Trade Area (ACFTA) as an example, saying it had caused losses and potential losses to a number of industries, such as textile and textile product (TPT) industries, footwear industry, electronics, wood and rattan-based furniture, toys, machinery, steel, food, drink and cosmetics.

Indicators of losses suffered after the implementation of ACFTA could be seen in reduced production of industry by about 25-60 percent, drop of sales at domestic market by 10-25 percent, reduction in profit by 10-25 percent and cut in manpower by 10-25 percent.

Several industries were also closed down while several others turned their activities from producers to assemblers and packers such as what had happened with machinery industries.

"In order to overcome this problem, the ministry of industry is carrying out coordination to take precautionary measures and increased competitiveness," he said.