Indonesian textile and garment producers look forward to a level playing field in the the United States after President Donald Trump decided to withdraw from the Trans Pacific Partnership trade pact, a representative of the local textile business association said.
The Southeast Asia nation now expects to export $4.8 billion worth of textiles and garments to the US this year, accounting for 39 percent of the archipelago’s total textile and garment exports, according to the Indonesian Textile Association, or API.
Last year the US market accounted for only 36 percent of the country’s textile and garment exports.
“The US’ decision to quit the Trans Pacific Partnership pact will benefit our textile industry. We can now compete at the same price point as the other textile exporters,” API Chairman Ade Sudrajat said early this week.
Neighboring countries such as Vietnam and Malaysia used to enjoy an import duty leeway for being a TPP member country, while Indonesian textile products are subjected to a 10 percent import duty when entering the US market, Ade said.
“President Trump’s decision to withdraw from the TPP should work in our favor. We can now compete on a level playing field,” he said.
Signs for increase in US textile orders have already surfaced with local producers reporting more US buyers have inquired about products and pricing. “In terms of enthusiasm, things are already a lot better than last year,” Ade said.
US market picking up should also help counter the drawback Indonesian textile producers are experiencing in the European Union markets, Ade said.
There, Indonesia has to face stiff competition from Vietnam, which gets an import duty of 0 percent under EU’s preferential treatment for its low and lower middle income partners.
Indonesia, as a member of the Group of 20, is no longer deemed as a middle income country and has to pay a 12.5 percent import duty, Ade said.
Indonesia and the EU are now negotiating on a bilateral trade agreement that will address this import duty issue. “We expect negotiations with the EU could be completed quite quickly,” Ade said.