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JAKARTA: Like suspected by many parties, cheap products imported from China have been steadily increasing since the implementation of the Asean-China Free Trade Agreement (ACFTA).
Such a situation is worried to batter the national manufacturing industry further.
The surging imports can be found in at least five strategic industries, such as apparel, children toy, iron and steel, food and beverage, and footwear industries, increasing 88.5% in May 2010 from that in January 2010.
Report made by surveyors at the loading port to the Ministry of Trade showed apparel import in May 2010 surged 22.2% to US$9.84 million from US$8.05 million in January 2010.
The surging Chinese product import is worried to widen the balance of trade gap and further injures Indonesia.
The business industry grouped under the Coordinating Team for the Handling of Industry and Trade Barriers (KPHIP Team) viewed the significant surge in cheaper downstream product import amid the ACFTA was potential to lower the market share of domestic market-based local industries.
As a result, the utilized capacity in the manufacturing sector may decrease on flourishing trade irregularities, such as dumping, underinvoice, and illegal import.
In addition, government efforts to curb import by applying early warning system, Indonesia National Standard (SNI), energy availability, and high-cost economy elimination have not been optimal.
Member of the KPHIP team Chris Kanter disclosed before the ACFTA and several trade liberalizations came into effect, classical problems facing the manufacturing sector had not been dealt with, leading to lower competitiveness.
According to Chris, the team together with the government had started intensively dealing with barriers such as electricity base tariffs, gas price, interest rate, standard tax invoice, overlapping regulations, slow SNI application, product labeling, high handing cost at port, and basic infrastructure problem.
"It is the time for the industries and the government to make consolidation to prevent competitiveness from further slumping in the free trade era," he appealed at a discussion titled Industry Development after the FTA Era and Response to Industry and Trade Competition Problems yesterday.
Trigger polemic
Chris added the business industry at the moment accepted electricity base tariff hikes since the government had simplified tariffs, such as eliminating maximum power tariff, multi-purpose tariff, and public light tax. "However, B-to-B tariff elimination has not been deliberated."
However, Executive Secretary of the Indonesia Textile Association (API) Ernovian G. Ismy was pessimistic State Electricity Company PT PLN (Ltd) would eliminate B-to-B tariffs.
"As electricity consumers, what we consider important is our monthly electricity bill," he told Bisnis yesterday.
If electricity tariffs were raised 10% and PLN still charged various costs outside electricity base tariffs (TDL), the industries would have to pay IDR830 - IDR900 per kwh.
However, if PLN raised TDL by 10% without eliminating various costs outside TDL, the industries may have to pay IDR1,000 per kwh.
"This is definitely not competitive. API doubts PLN will be so generous to eliminate B-to-B tariffs." (Bisnis/yuw/may)
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