VIVAnews - Indonesia’s issue with Free Trade Agreement (FTA) does not involve the policy itself. According to the Fiscal Policy Agency Head, Anggito Abimanyu, problems occur when imports grow faster than exports.
“In terms of the policy, FTA has great purposes,” Abimanyu said at the meeting with the House’s Finance and Banking Commission on Monday, February 1.
FTA aims to increase the competitiveness of Indonesian products in the international market, improve the purchasing power of local consumers and eliminate barriers in the international trade in order to create free trade.
Abimanyu also said the tariffs of several products have been gradually decreased since before 2010, long before the FTA was implemented earlier this year.
“So, it’s not because there are a lot of zero tariff this year. It’s because imports grow faster than exports,” he said. He also presented Finance Department’s trade document on Indonesia’s export and import composition.
The export shares of Indonesia, US and Japan went down, while China and India had an escalation. Exports to Australia went up from 2.64 percent in 2004 to 2.81 percent in 2009.
Below are the export shares of some countries in 2004 compared to 2009.
Japan from 22.3 to 16 percent, European Union from 12.3 to 11.8 percent, the US from 12.3 percent to 9.8 percent, South Korea from 6.8 to 6.4 percent, China from 6.5 to 9.9 percent, India from 3.1 to 6.5 percent, Australia from 2.64 to 2.81 percent and other countries from 17.2 to 18.4 percent.
Meanwhile, Indonesia’s imports from the US and Japan decreased while imports from China has risen. According to the Finance Department’s record, imports from Australia went down from 4.76 percent in 2004 to 3.09 percent in 2009.
In details, Indonesia’s import shares based on the original countries in 2004 in comparison to 2009 are: Japan from 13.1 to 8.7 percent, South Korea stayed in 4.2 percent, China from 8.8 to 12.1 percent, India from 2.4 to 2.2 percent, Australia from 4.86 to 3.1 percent, the US from 6.9 to 6.3 percent, European Union from 11.5 to 8.3 percent and other countries from 25.4 to 33.3 percent.
--
Translated by: Nataya Ermanti
