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Indonesia : FTA with the US to cover 50 items |
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2004-8-16
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About 50 products and commodities have been proposed by the government to feature in a possible future free trade agreement (FTA) between the country and the U.S., informs a senior official at the Ministry of Industry and Trade.
Sondang Aggraini, Director of bilateral cooperation at the ministry said that a study carried out by the Pranata Institute of the University of Indonesia (based on Indonesia''s trade performance up to 2002), these products were considered to have high potential to be exported to the U.S.
"But it is still a preliminary study. We need to find out more about the advantages and disadvantages of trading each of the commodities," Sondang informed on Friday.
She said that the products and commodities included textiles and apparel, furniture, sound recorders, natural rubber latex, telecommunications equipment, crustaceans, mollusks and aquatic invertebrates.
Textiles and apparel, for instance, recorded an export value of US$2.5 billion last year, or 33 percent of the country''s total exports in 2002.
Indonesia is aiming to form an FTA with the U.S. as part of efforts to boost trade with the world''s largest economy. The U.S. is the country''s largest export market after Japan.
Indonesia''s exports to the U.S. were around $7.6 billion in 2002 (mostly non-oil and gas), with a trade surplus of $4.9 billion. The two countries trade some 256 commodity groups.
Several neighboring countries have moved ahead in forming FTAs with the U.S. and developed nations. Singapore, for example, has established FTAs with the U.S., Japan, New Zealand, Australia and the European Union.
Deputy director for North American Affairs Tulus Budhianto said that an FTA with the U.S. would take more than three years to be realized.
"We might need at least three years to realize the FTA. Singapore needed fully three years to establish an FTA with the U.S.," he said.
Meanwhile, Sondang added that the government had not yet received the U.S. proposal about the FTA plan. She said that the U.S. version of the list of products covered should have been completed by July. "But until now, we have not heard any news from them."
Sondang''s office supervises bilateral cooperation with North America, China, Japan, Australia and South Korea.
According to Sondang, the Hawaiian-based East-West Center was working on an in-depth study on the FTA to identify the advantages and disadvantage of a future agreement.
Here are some exported commodities by Indonesia and their corresponding values in US$ million and in percentage of total.
Textile and apparel products 2,500 33.07
Furniture 490 6.48
Sound recorders or reproducers 405 5.36
Natural rubber latex 399 5.28
Telecommunication equipment
and parts 356 4.71
Crustaceans mollusks &
aquatic invertebrates 215 2.84
Source: Ministry of Industry and Trade
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