The Indonesian Employers' Association (Apindo) revealed that Indonesia's export growth to partner countries has actually been slower after joining the Free Trade Agreement (FTA) which began in the early 2000s. Apindo Chairman Hariyadi Sukamdani said that this conclusion was the result of Apindo's research on the journey of the FTA so far. He gave an example, exports to non-FTA countries grew 4.1 percent (2012-2021) and FTA partners grew 3 percent. Then, the percentage of exports to FTA partner countries from 68 percent (2012) to 66.3 percent (2021).

Then, imports from FTA partner countries grew higher than imports from non-FTA partner countries. The percentage of imports rose from 78.3 percent to 86.3 percent.

In fact, according to Hariyadi, the FTA was expected so that Indonesia's trade could grow positively.

"We introspective as entrepreneurs, many are not ready it turns out. Textiles, electronics, footwear, that's all that has been ready so far. In the end, with many sectors not ready, that's why they are lucky," said Hariyadi in a review of the book 'Free Trade and Development of National Exports: The Role of National Products in the Import Market of FTA Partner Countries', at the Apindo Office, Jakarta, Thursday (2/2 /2023).

He said Indonesia must focus on continuing to develop industries that generate added value. This is because, according to the CEO of the Sahid Group, Indonesia's exports are too dependent on raw materials or extractive exports.

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"We have indeed increased, but it is exports that are extractive. If it's managed properly it's fine, but if it's like in North Maluku, the growth is 20 percent but the poverty is actually 80 percent," said Hariyadi.

Instead of encouraging the value-added industry, Hariyadi assesses that the government is still making it difficult for this industry to continue to grow. He gave an example of the taxes imposed on business actors when importing raw materials.

"We are importing materials subject to VAT, not yet trading, already subject to VAT. Meanwhile, during the FTA, the tariff was zero for their goods to us. So the problem is at the end of our product, it is sold domestically, the problem is at the end," said Hariyadi.

Meanwhile, Executive Director, Center for Strategic and International Studies (CSIS) Yose Rizal Damuri revealed that FTAs actually only talk about market access. If a country cannot read the market, he said, of course FTA will not be used optimally.

"If there is no competitiveness, marketing intelligence, market access cannot be used optimally. For example, just make flies can't be solved by us. Production competitiveness cannot be separated from the industrialization policy as a whole," he said in the discussion.

He said, Indonesia must follow the example of India and China which support business actors in preparing products that have high competitiveness.

“It's okay for them to be subsidized, but within the framework of supporting competition. It is rather difficult to increase competitiveness if there is no competition," said Jose.