FTA worries some

In Asean Free Trade Agreement, World on January 6, 2010 by viCheth

The Straits Times (Singapore), By Lynn Lee, Correspondent, Jan 6, 2010

Their concern: They wil not be able to compete with Chinese imports

JAKARTA – A FREE trade area (FTA) set to boost the flow of goods and investment between Asean and China has triggered calls from Indonesia’s businesses for protection from their Chinese competitors, even as consumers cheer its potential to offer more choices and lower prices.

Some businesses in Malaysia, Thailand and the Philippines have also expressed reservations about wide-ranging tariff cuts on Chinese imports under the FTA.

Under pressure from the business community, the Indonesian government is seeking to re-negotiate the deal, which was signed in 2002 and kicked in last Friday.

Under the FTA, China and the six founding Asean countries – Indonesia, Singapore, Thailand, the Philippines, Malaysia and Brunei – must cut tariffs on 90 per cent of imported goods across 7,000 product categories. The group’s newest members – Cambodia, Laos, Vietnam and Myanmar – will gradually reduce tariffs and must eliminate them entirely by 2015.

China is now Asean’s third-largest commercial partner after Japan and the European Union, with a trade volume of US$230 billion (S$320 billion) in 2008.

In the run-up to Jan 1, Indonesian trade associations – particularly those in the steel and textile businesses – had voiced concern that the FTA would lead to a surge of cheap China imports and put them out of business.


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