Indonesia may seek tariff cut delay

Indonesia may lodge a formal request with Southeast Asian neighbours to delay some tariff reductions under a free trade agreement with China, an official from the country's trade ministry said on Monday.

The pact between China and Asean covers about 7,000 product lines and came into force this year.
But Indonesia has led resistance after sectors such as textiles and garments complained that the agreement left them vulnerable to cheap Chinese imports.

Iman Pambagyo, director of regional co-operation at Indonesia's trade ministry, said Jakarta was considering asking for implementation of the pact to be delayed for some sectors. "It has been discussed among the ministers and will be brought to the president soon. The cabinet decision will be in January, I am confident about that,'' he said.

Indonesia's co-ordinating minister for the economy, Hatta Rajasa, said last week that a team had been set up to investigate whether the pact would damage the economy. "If it's unfair, we can reject it. We'll do something to protect our national interest,'' he said.

Under the pact, Indonesia, Malaysia, Brunei, the Philippines, Singapore and Thailand have to reduce to zero tariffs on about 90% of imported goods. Laos, Vietnam, Cambodia and Burma have up until 2015 to make the cuts.

Manufacturers of goods such as textiles, footwear and steel in countries such as Thailand, Vietnam, Cambodia and Indonesia appear vulnerable to cheap Chinese imports.