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Indonesia hopes FTA will boost export to China

The Jakarta Post

18 June 2004

RI hopes FTA will boost export to China

Zakki P. Hakim, Jakarta

The government said on Thursday that Indonesian exports to China could
double in three years following the gradual implementation of a free
agreement (FTA).

Director general of international cooperation at the Ministry of
and Trade Pos M. Hutabarat said Presidential Decree No. 48/2004 was
on Tuesday, ratifying the FTA between the Association of Southeast Asian
Nations (ASEAN) and China.

"After the ratification, we target to double our export value to China
from US$2.9 billion last year to $5.8 billion in 2007," he said.

China, with its fast growing economy and huge population, is
becoming an important market for Indonesian exports.

ASEAN agreed to set up an FTA with China in 2002, and during the 2003
ASEAN Summit on Bali, the grouping further agreed to accelerate the
realization of the FTA through an early harvest program. In addition,
six founding members of ASEAN agreed to set up an FTA with Japan by 2010
and with India by 2011.

Pos said that since Jan. 1, Indonesia had reduced import tariffs on some
600 of 11,000 products listed in the ASEAN-China FTA as part of the
harvest program.

He said by 2010, when the FTA with China is fully established, ASEAN
expected to have cut down or removed import tariffs on up to 95 percent
listed products.

The remaining 5 percent are classified as sensitive products, including
electronics and automobiles.

Pos also said ASEAN planned to accelerate the implementation of the FTA
with India, hoping to implement the plan gradually starting next month.

"But the number of products to be included (in the early harvest) are
still being discussed by trade officials," he said.

Meanwhile, the FTA with Japan, which is set to be initiated in January
2005, might be delayed, as ASEAN and Japan were still negotiating on
product selection, he said.

"Negotiation has been difficult, since apparently Japan is trying to
protect its agricultural products," he said.

ASEAN groups together Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, Singapore, Thailand, the Philippines and Vietnam; China, India
and Japan are ASEAN dialog partners.

Meanwhile, Pos played down fears over the possible impact of an economic
slowdown in China on bilateral trade. He stressed that none of Indonesia’s
export products would be affected by China’s tightening measures, which
include investment bans on certain sectors, and added that China was
likely to enjoy a soft landing.