Industries design scenarios for AC-FTA renegotiations

The Indonesian Textile Association (API) will propose that 94 tariffs of textiles and garments in Normal Track 1 be shifted to Normal Track 2 and the Sensitive List as part of free trade agreement renegotiations.

In exchange, API is ready to let go 77 tariffs in Normal Track 2 and the Sensitive List already agreed upon under a free-trade agreement with the Association of Southeast Asian Nations and China (AC-FTA), chairman Benny Soetrisno said Thursday.

The AC-FTA, which was signed in 2004 and will come into effect on Jan. 1, 2010, gradually scrapping prices for products imported from China.

“We actually prefer the second scenario, where we exchange some tariffs [from Normal Track 1] with others in Normal Track 2 and the Sensitive List,” Benny, who is also Indonesian Chamber of Commerce and Industry (Kadin) deputy chairman on distribution and trade, said after a meeting at Kadin.

Concerning the first scenario, API proposes that 129 tariffs from Normal Track 1 move to Normal Track 2.

Normal Track has been effective since July 2005, with gradual reduction of over 9,000 price lines. These tariffs must be slashed to zero by January, 2010.

Items included under the Sensitive List must not exceed 20 percent in import duties by 2012, and 5 percent in import duties by 2018. A maximum of 50 percent of import duties must be met by 2012 for highly sensitive products.

The meeting was attended by representatives from the pharmaceutical, healthcare, steel, footwear, textiles, food and beverages, automotive, cement, electronics and sugar industries.

Benny urged other industries to submit similar proposals as soon as possible.

He said the steel, pharmaceutical, food and beverages, electronics, automotive and footwear industries had prepared similar proposals.