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Jakarta looks to reopen ASEAN-China FTA

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An Indonesian shopper browses fabrics Friday in a textiles store in Jakarta. The textiles industry is one of many sectors that the Indonesian government says has expressed concerns regarding an ASEAN free trade deal with China that came into effect on January 1. AFP

Indonesia says it has sent letter on trade deal to ASEAN nations

JAKARTA

We have also held some informal communication to get a win-win solution."

INDONESIA notified its ASEAN partners that it wants the group’s free trade agreement with China to be revised, Trade Minister Mari Pangestu said Monday.

In a letter to the ASEAN secretariat, the Indonesian government sought to “renegotiate” some parts of the accord, which took effect at the start of the year, Pangestu said.

“We have also held some informal communication to get a win-win solution,” she told reporters in Jakarta, without saying when the letter was sent.

ASEAN chief Surin Pitsuwan said Thursday that Indonesia's trade ministry had sent the other nine bloc members a letter expressing some “difficulties”.

But, speaking at an ASEAN meeting in Danang in Vietnam, he said there had been “no appeal for any change or any renegotiation” of the pact.

Indonesia's Foreign Minister Marty Natalegawa told reporters at the event that the country is committed “to respect and abide by any international agreements that we have reached, including the ASEAN-China FTA”.

He said Indonesia's trade ministry had passed to the bloc’s secretariat some business-sector concerns to see how they could be addressed within the existing trade deal.

China’s agreement with the 10 members of ASEAN scrapped tariffs on about 90 percent of goods, and duties must be cut to no more than 50 percent on “highly sensitive” items by 2015.

Opposition has been loudest in Indonesia, where industries including textiles, food and electronics said they will suffer from the inflow of cheaper Chinese goods. Indonesia is ASEAN’s largest country by geography, population and size of the economy.

China’s trade with ASEAN has jumped sixfold since 2000 to US$193 billion last year. China’s share of Southeast Asia’s total commerce has increased to 11.3 percent from 4 percent in that time, whereas the US portion fell to 10.6 percent from 15 percent, ASEAN statistics show.

Indonesian Industry Minister Mohamad Hidayat said Friday there were 228 items that the government wants to delay from including in the free-trade accord, including steel and textile products. Negotiations within ASEAN might start this month, and Indonesia was ready to open previously protected items as a concession, Hidayat said without elaborating.

BLOOMBERG AND AFP

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