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FTA drives Indonesian clothing firms to the edge

04 May '10
4 min read

While a year ago, a clothing manufacturer in Jakarta was trading 1,800 bundles of garment every week for a total profit of $330, this year the demand and profit dropped adversely as his buyers started stocking low-priced Chinese garments and then sold them at a 25 percent lesser value. He feels that if the business continues in the similar manner then he will soon be forced to shut shop.

Refuting allegations and blown-up explanations of the trade deal, Indonesian Trade Minister, Mari Elka Pangestu said that, “I understand that many of the country's textile industries are concerned about unjust competitions but, we promise to find apt solutions to resolve them. Till then, it is important for the Indonesian textile firms to turn competitive and they should also consider the positive points of the trade deal such as the availability of low-priced high-end textile machineries.”

Explaining further, Pangestu gives the example of the Indonesian denim industry that has been taking advantage of the free trade pact, by purchasing cotton from China. It then converts them into denim wear and sells it back to China. Therefore, the trade deal, according to Pangestu is not as bad as it is projected; it is just a matter of perception.

Fibre2Fashion News Desk - India

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