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Malaysia, Vietnam may grab Indonesia's manufacturing market
(Kompas/Priyombodo)Indonesiaâs manufacturers said that they had been concerned since Malaysia and Vietnam joined with eight countries in the Trans Pacific Partnership (TPP) agreement
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(Kompas/Priyombodo) (Kompas/Priyombodo)
(Kompas/Priyombodo)
Indonesia's manufacturers said that they had been concerned since Malaysia and Vietnam joined with eight countries in the Trans Pacific Partnership (TPP) agreement.
Both countries' products would be more competitive with tariff cuts and less barriers, which in turn would endanger Indonesia's market share, secretary-general of the Indonesia Textile Association (API) Ernovian Ismy said.
"They join and give incentives to access their market. It is possible for Vietnam and Malaysia to crush Indonesia's products exported to TPP members such as the US," Ernovian was quoted by kontan.com as saying.
According to him, Malaysia, Vietnam and Indonesia had similar manufacturing products, such as textiles and textile products (TPT), tires, automotive parts and electronic products.
API's data shows Indonesia exported US$12 billion in TPT last year. The biggest markets were the US (36 percent), the Middle East (23 percent), Europe (16 percent), Japan (7 percent) and Southeast Asia (7 percent).
Chairman of the Indonesian Shoe Manufacturing Association (Aprisindo) Eddy Widjanarko said that TPP, as a new free-trade block, would take effect in the long term.
"Vietnam will book more orders for their footwear, while Indonesia is going to be stagnant," he said.
Referring to Industry Ministry data, Indonesia's footwear exports amounted to $4.11 billion last year, increasing 6.44 percent from the previous year's exports totaling to $3.86 billion. The export destinations were the US, UK, Belgium, Germany and Japan.
As previously reported, the US, Canada, Japan, Australia, Brunei Darussalam, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam have joined in the TPP trade deals. The 12 countries comprise 40 percent of world trade.
Both Ernovian and Eddy stated the government should join the free-trade pact as well, adding that if it was not possible, the government should create a similar pact with Europe and Turkey as soon as possible.
Director of PT Pan Brothers Fitri Ratnasari Hartono said Indonesia's products would be lost in competition without a new free trade deal with Europe. Indonesia's textile market in the US and Japan could be taken over by TPP members.
"It is possible to join with Europe, because we have started the initial dialog," she said. (ags/dan)(++++)
