JAKARTA, KOMPAS – A coalition of civil society for economic justice urges the Indonesian House of Representatives to delay the process of ratifying various international trade agreements. Because, without an in-depth and comprehensive study, international trade agreements can potentially harm the community.
Note from the Ministry of Trade (Kemendag), as of March 2019, there were 12 international trade agreements that were in the stage of ratification. Some of them, namely a comprehensive economic partnership agreement between Indonesia-Australia (IA-CEPA), a comprehensive economic partnership agreement between the Indonesia-European Free Trade Association (Indonesia-EFTA CEPA), and the ASEAN agreement in electronic commerce.
“These various international trade agreements not only regulate exports and imports, but also regulate all aspects of people’s lives. These include intellectual property rights, agriculture and food, health, education, digital economy, and so on. So, a comprehensive discussion by the Indonesian Parliament is absolutely necessary, “said the Director of Indonesia for Global Justice Rachmi Hertanti, in Jakarta, Thursday (03/14/2019).
The time rule regarding the ratification process is regulated in Law Number 7 of 2014 concerning Trade. In Article 84 paragraph 4, it is said, if the Indonesian Parliament does not make a decision within a maximum period of 60 working days during the session, the government may decide whether or not the approval of the Republic of Indonesia Parliament is necessary.
Rachmi highlighted that in the period leading up to the simultaneous general election on April 17, 2019, the focus of parliamentarians would certainly be biased. He considered, if the Indonesian Parliament rushed to ratify or decide that DPR’s approval was not needed, then the people would suffer the impact.
This insistence was conveyed during a press conference of the Civil Society Coalition for Economic Justice with the theme “Many FTAs will be Ratified, the Fate of the People Neglected as a Result of the DPR’s Busy 2019 Election Campaign”.
Other resource persons from various coalitions were present, namely Indonesian Research Coordinator for Global Justice Rahmat Maulana Sidik, Researcher of Civil Society Coalition for Economic Justice Lutfiyah Hanim, Indonesian Traditional Fishermen Unit Henrikus Setya A Pratama, People’s Coalition for Parid Ridwanuddin Fisheries Justice, National Union Confederation Aip Saipullah, and the People’s Struggle Unit Herman Abdulrohman.
In line with that, Lutfiyah stated, if the international trade agreement is considered to be able to spur exports, in reality this is not the case. Because, the average utilization of international trade agreements is still low.
Data from the Ministry of Trade shows, in 2018, the percentage of utilization of international trade agreements for exports is still low. For example, ASEAN Trade In Goods / ATIGA (54.7 percent), ASEAN-Australia New Zealand / AANZFTA New Zealand (54 percent), Indonesia-Japan / IJEPA (47.2 percent), and ASEAN-Australia / AANZFTA Australia (46 , 4 percent).
Referring to the same data, the coalition noted, the average utilization of international trade agreements is only 30 percent to 35 percent. “In fact, with more and more international trade agreements being signed, more and more import doors are open, not the other way around,” Lutfiyah said.
So, if it is not comprehensively studied, Lutfiyah considers that this cooperation will actually harm Indonesian people even to the farmers. According to him, the concept of economic powerhouse in the IA-CEPA is designed to add value to Indonesian products, in practice later, this is not the case.
“Through this concept, instead of using and absorbing local agricultural products, what happens will actually increase the use of raw materials for agricultural products from Australia to be processed in Indonesia. Of course Australia’s imported products will increase and the trade deficit will continue, “Lutfiyah said.
The Ministry of Trade noted, from the trade between the two countries in 2018, Indonesia had a deficit of US $ 3 billion. Total trade reached 8.6 billion US dollars, with Indonesia’s exports recorded at 2.8 billion US dollars and imports at 5.8 billion US dollars.
The Central Statistics Agency also noted that Indonesia’s non-oil and gas trade balance with Australia in January 2019 was a deficit of US $ 208 million, down 16.85 percent compared to last year.
In addition, instead of pursuing export targets through the use of international trade agreements, Henrikus stressed that the government should complete homework that still hampers competitiveness. For example, the issue of importing salt.
Based on data from the Ministry of Maritime Affairs and Fisheries, salt production as of December 2018 reached 2,719,256 tons, including salt produced by community farmers 2,349,630 tons and PT Garam (Persero) 369,626 tons. Last year, the government set an import quota of 3.7 million tons of industrial salt, higher than the average import of industrial salt which is around 2 million tons per year. In 2017, the total national salt production is 1.11 million tons. (Kompas, January 21, 2019)
“Instead of importing, why does the government not fix the local industry in order to increase production capacity. If it is said that the quality of local salt does not meet the standards, why not repair it, don’t even import it, “said Henrikus.
On the other hand, Maulana said, the process of negotiating the international trade agreement was not democratic. In fact, the House of Representatives of the Republic of Indonesia, as the people’s representative, has never opened or invited civil society to give a view on the analysis of the impacts.
Based on the Indonesia for Global Justice survey in 2018, 64.8 percent of the people considered that the parliament was less serious in taking a role in overseeing international trade agreements. 50 percent of the people are also doubtful if members of the Republic of Indonesia Parliament know the contents of the agreement. “International trade agreements are long-term strategic policies, not just technical policies. Don’t let the government’s ambitions in completing various agreements actually ignore the rights and fate of the Indonesian people, “said Maulana. (SHARON PATRICIA)