The Indonesian government has come under fire over a glut of Chinese products into the domestic market following the implementation of ASEAN-China Free Trade Agreement (ACFTA) since early last year.
As the influx of cheaper Chinese goods has begun to hurt domestic producers, many are at odds over whether free trade accord with China is necessary.
While asking the government to review the accord, Deputy Chairman of the House Commission VI Nurdin Tampubolon said local producers are under a threat of bankruptcy due to an unusual surge in the flow of Chinese products into the country.
“If the accord is continued, the national industry will collapse. It is a matter of time for them to go bankrupt,” Nurdin of the People`s Conscience Party (Hanura) said.
To prevent the accord from putting a further strain on domestic producers, the government must try hard to renegotiate it or face the national industry to collapse, he said.
What is most likely to deal with the matter other than renegotiating the accord is improving the competitive edge of national products. But this is not an easy job because the government has to improve various regulations, scrap illegal levies, cut lending rates, and control imported goods, among others, he said.
Right now the implementation of ACFTA has begun to hurt the national industry and affect products in regions, he said. “I have just arrived from a working visit in Maluku where I found imported goods, including fish were sold there. As a matter of fact, we are a maritime state.”