Scrutinizing the benefits and downsides of the recently signed US-led Trans Pacific Agreement (TPP), the Indonesian Textile Industry is mulling over the agreement from all angles, clause by clause.
While speaking on the issue, Indonesian Textile Association’s (API) Advisory Board Chairman Benny Soetrisno said that the TPP is expected to benefit the local industry. However, there are certain clauses that needs to be taken into account. “There’s a provision in the TPP that will cut tariffs only for garment products made using materials sourced from the member countries,” he said.
The ‘yarn-forward’ clause requires textile and apparel products to be made, using yarns and fabrics made by TPP members, to qualify for zero-tariff in trades among the member countries.
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API chairman Ade Sudrajat said that according to his association’s estimates, the TPP could more than double Indonesia’s textile exports in a decade, as USA is one of its major markets. Indonesia’s textile exports rose from $8.6 billion in 2005 to $12.7 billion in 2014. The recent hue and cry over the yarn-forward clause emerged after the country’s industry data showed that in 2014, Indonesia imported a total of US$8.6 billion textiles in the form of fibre, yarn, fabric, garments, tapestry and other textile products, with a big chunk coming from China, which is not a TPP member.
Meanwhile, Vietnam has also raised a similar issue, as it still imports some fabrics from China.
TPP was signed by 12 countries — Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the US.
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