Indonesia is seeking to open new markets for its textile and garment products – not only are free trade agreements with Australia and fellow Asian countries on the cards, the industry’s association and the government have announced, but the industry is also targeting African export sales.
Indonesia is setting its sights on African countries such as Morocco, Tunisia and Mozambique as potential markets for its textile and garment products, trade minister Enggartiasto Lukita says. His comments come as industry leaders and the government in Jakarta also bid to capitalise on the current US-China trade war to boost sales in America.
“The government is giving its full support and doing everything it can for the expansion of the industry, for investors, especially those who are export-oriented,” says Enggartiasto said during a meeting with the Indonesian Textile Association (API – Asosiasi Pertekstilan Indonesia) in Bandung on 14 September.
The minister says Indonesian textile companies should capitalise on an upcoming planned Regional Comprehensive Economic Partnership (RCEP) free trade agreement between the Association of Southeast Asian Nations (ASEAN), of which Indonesia is a member, and six other countries – China, Japan, South Korea, India, Australia and New Zealand: “Almost half of the world’s population are in those markets; that’s where we should come in,” stressed Lukita. Industry leaders needed to be involved in trade negotiations with other countries, he said.
“I will take them with me on foreign trips. It will be more effective if we have a business delegation during one-on-one forums,” he said, as he announced plans to tap into new African markets.
“Tunisia, Morocco and Mozambique can be gateways to other African countries as well as to Spain and France.”
Anne Patricia Sutanto, vice-president director of PT Pan Brothers Tbk, one of the country’s largest garment holdings companies, says Indonesian exporters have been quite competitive with other country’s garment and textile companies in this emerging region.
As for the importance of trade deals, “buyers or brands are always doing landed cost calculation, and therefore the bilateral and multilateral agreements give Indonesia the same platform as our neighbouring countries,” she says.
Assuming these deals come through, the growth of Indonesian textile and clothing exports could be “in double digits, and since we are competing on the same platform, the chances of foreign direct investment in textile in Indonesia would grow more than our GDP growth,” she adds.
“In the long-term, Indonesia will continue to grow at an accelerating pace since we will be able to supply the world with faster and more competitive lead times compared to other neighbouring countries,” she predicts.
Ade Sudrajat, chairman of the API, says he expects Indonesia-made textile and garment products soon to be able to enter Australia duty-free thanks to a free-trade agreement between the two countries, which is expected to be signed next month. He also says he hopes negotiations on RCEP will be completed next year.
As for Indonesia’s eyeing of the US market to capitalise on the ongoing trade war between China and the US, he said: “The government wants exports to the US to double to reach US$50bn in 2024. Naturally we will have to import a lot of cotton from the US, and when we use US cotton we will get export privileges.”
Source: www.wtin.com