The World Trade
Organization [WTO] axed growth projection percentage this year to become 2.5%
of the estimated 3.3% in April 2013. Export and import performance of the
developed nations and developing nations were the underlying calculation for
this projection beside other supporting data.
According to WTO, demand for import in developing
countries although admittedly increasing was progressing in lesser speed than
expected. The condition was rated as holding back export growth of developed
and developing nations in the first half of 2013.
Besides, consumption level, trading growth, and
unemployment Uni European states were predicted no to descend significantly
from the present level. Uni Europe consumed one third of the goods traded in
the world. However, WTO also noted debt crisis in Uni European states was
reduced significantly since last year.
In their latest prediction, WTO projected world’s trading
commodities grew by 2.5% in 2013. Meanwhile export would increase by 1.5% in
developing nations. On the contrary growth of import in advanced states would
stagnate at around 0.1%. Meanwhile in the developing countries import was
predicted to increase by 5.8% through 2013.
In 2014 WTO predicted global trading would grow by 4.5%
with export increasing by 2.8% in developed countries and 6.3% in developing
countries. Next year import growth among developing countries would increase to
3.2% while import in developing countries would also increase to 6.2%.
Although slowdown in trading was mostly caused by macro
economic turbulence, there were strong indications that protectionism was
playing its role and was now taking its different shape which was hard to
detect. Some countries were allegedly exercising protectionism in disguise to
protect their national interest.
Some developing countries were striving hard to urge
developed countries to open their domestic market so products from developing
countries could enter the markets of developed countries. Only trouble was, crisis
in the developed countries made it difficult for them to the developing
countries.
China was one of the emerging countries which was deeply affected
by world’s economic slowdown. Demand for commodities from China by European
states dropped drastically in the past 2 years. Only trouble was that around
70% of China’s GDP was contributed by export. So when export slumped, the
Government of China aimed their export-ready goods to the domestic market or to
other emerging markets in Asia.
Stimulus in vast magnitude was injected by the Government
of China to keep their domestic economic machine rolling. The Government of
China feared the possible economic slowdown at is might smash the employment
sector. The sizable number of joblessness in China, around 8% of the 1.6
billion population was certainly most undesirable as it might trigger massive
social outburst.
That was the reason why projection of China’s economic
growth this year was axed to 7.5% after succeeding to grow by 7.8% last year.
In the first three quarters of this year, the average growth percentage in
China was around 7.6% per quarter.
It seemed understandable that economic slowdown in China
generated pressures on export volume from the emerging markets including
Indonesia. In the fast few years, trade balance between Indonesia and China
always posted surplus on the side of China. Indonesia’s export to China dropped
by volume and value. On the contrary import of raw materials and auxillary
materials from China was increasing steadily the result was deficit on
Indonesia.
In general WTO concluded that the slow growth of world’s
trading over the past 2 years encouraged countries to enhance multilateral
agreements; small wonder why bilateral and multilateral trade agreements
heightened lately. The only thing was, amidst pessimism of economic growth,
there was tendency of countries to review the Free Trade Agreement in the event
that one of the countries feel they were disadvantaged by the agreement.
Indonesia is one of the countries which constantly threw
a discourse to review FTA in terms of financial and economic benefit in the
long run. Since the FTA era in the past 3 years, national businesspeople
admitted they were not enjoying any benefit from trade agreements which was
indicated by export being always less than import.
The highlight of polemic today was on China Asean Free
Trade Agreement [CAFTA]. This agreement brought blissfulness to China but
misfortune on Asean, particularly
Indonesia the reason was because the Government and business players of China
were by far more ready for the game than their Asean counterparts.
Various distinctions of China’s products made them seem
cheaper than Asean products. High operational efficiency of companies in China,
supported by the right stimulus by the Government made their product highly
competitive. It seemed reasonable that China was able to score surplus in
bilateral or multilateral agreement.
To Indonesia, the disadvantageous situation should be
pondered carefully. Even if the multilateral agreement were hard to review as
it would be time consuming and energy draining, bilateral FTA could still be
reviewed in this case the Government must prepare a strategy and proposed
conditions acceptable to the participating countries. It was also necessary to
prepare skillful negotiators to troubleshoot trade disputes and handle other
irregularities.
The point was that review of bilateral FTA was necessary
to keep national interest from being scarified economically, socially and
politically. In this case the AEC which would be effective on January 1, 2016
for the non-financial sector must really be re-verified in terms of readiness.
Let there be no disharmony where the Government claimed to be ready but the
businesspeople were not.
The same step was necessary for the financial sector to
be effective by 2020. In the remaining period which was the time FTA in
non-financial sector and financial sector [2020], the Government and business
players must share the same vision, mission and strategy in implementing the
AEC 2015/2020. The change of Government in October next year must not pose as
hindrance to preparing for AEC 2015-2020.
While
improving the quality of agreement, the Government and national business
players must also keep up with trading development of the world which was
predicted to recover by 2015. At that time the new cabinet would be entering the
first year of office which was expected to be better than before. Hopefully so.
Business News - September 27, 2013
