Indonesia's Free Trade Agreement w/ China: Millions of Lost Jobs

[amborin]

As They Fold, Indonesia Garment Makers Blame China

.....For Rusli, the sound is a bitter reminder of the $2 line of jackets that bankrupted him, costing him a garment business it took 15 years to build.
He blames himself. He blames the government. But most of all he blames China -- specifically, the flood of cheap clothing that has poured into Indonesia this year under a free-trade agreement between the rising economic giant and its Southeast Asian neighbors.
The new competition quickly drove down prices, forcing Rusli to sell the jackets for less than they cost to make. Within months, he was broke and unable to pay his 22 workers.

The Indonesian government and many businesses leaders have hailed the pact as an economic boon that will allow the free flow of goods between countries encompassing 1.7 billion people, lowering prices for consumers and offering new opportunities for producers. The Trade Ministry expects two-way trade between Indonesia and China to double to $50 billion within five years. But some Indonesian industries say their small operations can't keep up with the Chinese juggernaut and they're calling on the government to do more to save their businesses from collapse.

''We're the ones losing this trade war,'' Rusli says, warning that soon his neighbors' sewing machines will follow his into silence.

The deal between China and six founding members of the Association of Southeast Asian Nations -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- went into full effect Jan. 1, eliminating barriers to investment and trade on 90 percent of products. Four more ASEAN countries -- Cambodia, Laos, Myanmar and Vietnam -- will be added by 2015.

The deal is expected to benefit Indonesian industries such as palm oil, rubber, coffee and coal by making it easier for them to feed China's voracious appetite for industrial raw materials and other commodities. Yet there are other industries -- among them textiles and garments, tires, steel and footwear -- who say they aren't ready to go head-to-head with China's aggressive, lower-cost producers and have called on the government to delay the elimination of protective tariffs on 228 product lines.

Despite signs ministers were not unanimous in supporting the trade pact, the government has said delaying is not realistic because it would involve renegotiating not only with China but with all the Southeast Asian nations.
Baso Rukmana, chairman of Indonesia's National Workers Union, predicted the trade deal would drastically increase unemployment in labor-intensive industries, with up to 7 million jobs lost.

snip

http://www.nytimes.com/aponline/2010/04/26/business/AP-AS-Indonesia-China-Trade-Fears.html?_r=1

[Elwood P Dowd]

1. The new corporate "Free Trade" (not David Ricardo's Free Trade) has become a deadly

pandemic that is killing working people all over the globe.

[aquart]

2. Ah, China.

[Greyhound]

3. Now why would anyone unrec this?

Sheesh, what has become of this place?