ASEAN-China FTA to Slow Down Inflation Pace

An Indonesian official said here that the implementation of ASEAN-China Free Trade Agreement (ACFTA) would be able to slow down the inflation rate of Indonesia due to reduction of commodity prices.

He took clothes and garments for example, saying the may-be price reduction of these commodities would significantly slow down Indonesia's inflation, Indonesian Statistic Bureau Head Rusman Heriawan told a press conference here.

Besides slowing down the inflation rate in the country, Rusman added that ACFTA implementation would also reduce smuggling activities.

"There should be a significant reduction in smuggling since the import tariff has become zero," Rusman said.

The head of the country's central statistic agency also said that ACFTA had given more opportunities for Indonesia's Crude Palm Oil industry as they could enter more markets.

He, however, cautioned that textile, footwear and steel commodities may face problems due to the ACFTA implementation because they have to compete with cheap Chinese products difficultly.

In order to reduce the negative impacts of ACFTA implementation, Indonesian officials must undertake renegotiation talks with their Chinese counterparts over sectors considered not ready to get involved in the ACFTA, Rusman said.

Besides, Indonesian government may use the non-tariff measures and set Indonesian product quality standard (SNI) requirement to protect the country's industries, he added.