ANNOUNCED AS TEMPORARYNo
On 21 January 2010, President Susila Bambang Yudhoyono said to reporters that the government would protect businesses, while pursuing talks with China to avoid negative impacts of the free trade deal between ASEAN and China (the ACFTA).
The ACFTA became fully effective on 1 January 2010 and has introduced zero tariffs in 17 sectors including manufacturing, agriculture, mining and maritime sectors. The House of Representatives' commission VI overseeing industry and trade has earlier demanded the government to re-negotiate tariffs on garments, furniture and footwear, among others. The governement is given six months to re-negotiate and review this issue. Hatta Rajasa, Coordinating Economic Minster, has confirmed that the re-negotiation of the FTA is on the agenda with the president.
Sri Mulyani Indrawati, Finance Minister,said the government would boost business competitiveness by revitalizing labor-intensive manufacturing industry and provide greater access for SMEs to borrow, while building and improving infrastructure to ease the flow of goods. He added that the government has fiscal space in the state budget to protect certain industries hurt by the ACFTA.
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