ASEAN-China FTA to prompt “tug of war in trade”

A free trade agreement between the Association of Southeast Asian Nations and China (ASEAN-China FTA) will likely prompt a trade war between Indonesia and China, says an association.

Indonesian Textile Association (API) deputy chairman Ade Sudrajat said Wednesday local producers would likely ask the government to impose a number of tariff and non-tariff barriers, such as anti-dumping measures and other safeguards, as Chinese products would further injure domestic players once the FTA became effective.

China might consequently retaliate by imposing similar measures, he added.

“They [China] may retaliate [by imposing trade barriers] on Indonesian fish and shrimp exports if Indonesia promptly imposes anti-dumping [duties] when imports of Chinese textiles soar,” Ade said.

Dumping occurs when a manufacturer in one country exports its products to another country at prices below those charged in its home country or below its production costs, while anti-dumping measures are initiatives taken to counter dumping practices, such as imposing (additional) import duties.