Garment producers admitted one of the ways to wall out flooding import was to increase added value on the products. The reason was that in the future import of garments would increase so it had the potential to injure to domestic garment industry. The garment industry was also asked produce fashion products to shield of invasion of foreign products. In the future big scale and small scale garment industry might be expected to synergize.
Big scale garment industry might make purchase order from small scale garment producers. Insertion of accessories in garment products in the big industry sector might be delegated to small industry. “This is one way to promote potentials of small garment industry whereby to survive amidst flanking imported products” Redma Gita Wirawasta. Secretary General of The Association of Indonesian Synthetic Fiber Producers (Apsyfi) was quoted as saying in Jakarta on Friday (23/11/2012).
Redma saw that garment producers still found it hard to sell their products to the international market. However they needed not to wory because the domestic market was still vast enough to be tapped. He saw that the domestic garment market was not fully explored. Besides people’s interest in garment products was still great. Redma mentioned that some garment producers had managed to market their products to modern retail market.
Recline estimated that based on the assumption that Indonesia’s population was 240 people, national garment consumption might come to 1.52 million tons. Based on the assumed price of USD 7.5 kg per kg, the figure was equal to USD 11.52 billion. Meanwhile he added on, until Semester I 2012 to total surplus of national trading of textile and textile (TPI) products went down from USD 5 billion - USD 6 billion to become USD 2 billion. The reason he said was because Indonesia still imported vast amount of textiles.
He saw that there was the bright side and darker side in Free Trading. The positive side that access the Chine’s market was widely open end in reverse China’s investors could corns to Indonesia, which would have its positive impact on employment. The negative side of it was, according to Redma, uncertainty for businesspeople because inefficiency might result in their losing competition in the market so the local market share would be possessed by China’s products; and under such circumstances local producers might go out of business and change profession as traders. Redma warned that such was the negative side of free trade. He illustrated that even now there were already some textile industry in West Java who were planning to dismiss their workers. “We cannot sit on our laurels and let it happen. Only by stepping up our product’s plus point we can compete” Redma remarked.
The Apsyfi Association also urged that import tax for garment be increased to 35% against the present 15%. Redma stated that protection for the downstream sector could be done by increasing income tax for ready garments or application of safeguard. He also remarked that strengthening of the domestic market was most important. However this commitment must be done by sound policy not just pleading or discourse. The recommendation was forwarded to the Government starting from the Ministry of Economy, Ministry of Finance, Ministry of Industry and Ministry of Trade in the hope it could be executed soon.
Redma explained that today percentage for MFN (Most Favored Nation) was 15% so Indonesia could increase up to 35% according to binding tariff permitted by WTO. For safeguard, political will from the Government was necessary because Indonesia only had data of import up jump only while data of injury were hardly available considering producers of ready garments were domestic-market oriented were mostly small and micro business most of which were not even formal companies.
Business News - November 28, 2012