Indonesian Participation in FTAs Criticized

 
Fitri Novia Heriani, Andin Aditya Rahman
 
Recent developments in global trade arrangements have made participation in free trade agreements (FTAs) a necessity, not a choice. Indonesia, for instance, has been a member of the World Trade Organization (WTO) since 1994.
 
For the more recent and current FTA arrangements, Indonesia has entered into the ASEAN Free Trade Area (AFTA) and the ASEAN – China Free Trade Area (ACFTA), as well as the ASEAN Economic Community (AEC) due to commence in 2015.
 
While joining such alliances may be unavoidable, activists, academics and even members of parliament have criticized the Government’s manner in treating FTAs citing a failure to give adequate consideration to national interests.
 
Hendri Saparini, Executive Director of the Center of Reform on Economics (CORE), argues that most FTAs, such as AFTA and ACFTA, are disadvantageous to Indonesia. These FTAs have caused a flood of imported products, which in turn has resulted in Indonesia’s trade balance deficit.
 
In line with Mrs. Saparini’s views, Hikmahanto Juwana, a law professor at the University of Indonesia, believes that the Government must take into account all necessary due considerations when entering international agreements, specifically those of relevance to Indonesia’s trade laws and regulations.
 
“On matters regarding international agreements, the Government must be careful because these agreements frequently have implications,” stated Mr. Juwana during a seminar held by Hukumonline on Tuesday.
 
In order to avoid future mistakes in international agreements, Mr. Juwana suggested the Government avoid agreements for the sake of pleasing neighboring nations, and instead better keep domestic businesses in mind.
 
“We are not anti-foreign, but we should have a reasonable bias for domestic businesses when we must face foreigners. That is good,” asserted Mr. Juwana.
 
Similar criticisms have also come from lawmaker Aria Bima, Deputy Chairman of Commission VI at the House of Representatives (House), who said that the Government has disconnected the Parliament from the process of entering international agreements.
 
“Indonesia makes international agreements like no other, without the Head of State or the Parliament and is only represented by the executives,” explained Mr. Bima.
 
This issue may, however, take a turn for the better in the near future with the recent enactment earlier this year of Law No. 7 of 2014on Trade.
 
Every intention expressed by the Government to enter an international agreement must now involve the relevant commission at the House. The House will then approve or refuse the Government from entering into the respective international agreement.
 
(For more information on the Bill on Trade, see: ILB No. 2342and ILD No. 347)
 
(hot/kc)