The Indonesia government aware of the threat from Trans Pacific Partnership (TPP) toward its manufacturing products especially textile and textile products (TPT) would be focusing on strengthening the competitiveness of the national industry before joining the free trade pact, TPP, said Indonesian Trade Minister Thomas Lembong on Friday.
According to the Indonesian Textile Association (API) data, Indonesia exported textile and textile products worth US$12 billion last year. The biggest markets for Indonesia were the US (36 percent), the Middle East (23 percent), Europe (16 percent), Japan (7 percent) and Southeast Asia (7 percent).
Thomas further added that Vietnam was the main competitor in the textile industry, joined the TPP and it has also recently completed a free trade agreement with the European Union which will make Vietnam’s market bigger since the European Union is composed of 20 countries. So indeed Indonesia has been left behind, Thomas asserted.
Thomas said that by joining the US-initiated pact, Vietnam’s products would be more competitive in the Indonesian market in the upcoming ASEAN Economic Community (AEC), starting December 2015.
Indonesia’s textile market in the US and Japan could be taken over by TPP members, he added.
The US along with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam have joined the TPP trade deal. The 12 countries comprise 40 percent of world trade. This is a major market in the world.
Indonesia’s manufacturers said that they had been concerned since Malaysia and Vietnam joined with eight countries in the TPP agreement.
Secretary-general of the Indonesia Textile Association (API) Ernovian Ismy said that both countries’ products would be more competitive with tariff cuts and less barriers, which in turn would endanger Indonesia’s market share,
But the major concern for President Jokowi, is that it will take two years to pursue the TPP agreement. [Indonesia joining the TPP].
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