JAKARTA: The implementation of the Asean-China Free Trade Agreement (ACFTA) has created several new leaders in electronic device import.
The new traders are estimated to show up with new brand names and some rejuvenate the dead brands.
Chairperson of the Indonesia Electronics Association (Gabel) Ali Soebroto Oentaryo revealed since the 0% tariffs were applied there had not been a trend of electronic makers shifting to electronic importers.
"I have not seen a shift from producers to importers. However, I can see new traders. Due to the 0% tariff, those that previously were out of operation now become new traders. New brands come up and the old ones are revamped," Ali said last week.
He explained the emergence of new players in electronic import had slowly eroded the market shares of old players and would be potential to threaten the domestic industry due to lost market share.
Such a threat, he continued, had been showing its signs since the imported products were circulated in the market. "Now we can start seeing the products in the market. If this runs for a long time, the domestic industry can be threatened."
He estimated the invasion of imported products would lower prices and trigger unhealthy competition.
However, added Ali, he was optimistic the labeling regulation applied on September 1 and the application of the Indonesia National Standard (SNI) would be able to contain the imported product volume.
The regulation requiring products to have Indonesian language label, he continued, was a simple yet effective non-tariff barrier to contain imported electronic products, although it would be as effective as SNI.
"The SNI will require products to be tested and plants to be surveyed, so the policy will be far more effective. However, the non-tariff barrier is enough to deal with our worries about the possibility of the invasion of imported products through the new traders."
Additional cost
On another note, although the labeling policy was positive, the electronic businesses in Indonesia were still worried that the implementation of the regulation would create additional cost for electronic businesses importing finished products.
According to Ali, the principals all this time had only used Indonesian language for their brand names. Following the labeling policy, importers had to lobby the principals to revise their product names, brand names, voltage, watt, production site, the importer, and the producer into Indonesian language.
"The cost for this is expensive [in the exporting countries]. The principals are willing to follow the policy, but the expensive cost has to be endured by the importers."
Ali added the condition was exacerbated by the government policy of requiring labels be attached on product packages.
The Gabel, he continued, objected to the requirement since it would complicate the production process and, in turn, increase the cost of package change.
"We plan to discuss this matter as soon as possible with the Ministry of Trade. We object to the packaging-related policy despite its good intention of giving more detailed information to consumers and substituting for the lost tariff barriers." (Bisnis/may)
http://www.bisnis.com/pls/bisnis/bisnis.cetak?inw_id=740523
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