The government has been urged to apply a harmonized tariff structure from upstream to downstream for the textile and textile products (TPT) industry. Ideally, the imposition of import tariffs on downstream products should be higher than those for upstream products.
This includes the imposition of temporary trade security tariffs in the form of security or the imposition of Safeguard Measure Import Duty (BMTP). Thus, Garment producers will more optimally absorb domestic raw materials while at the same time obtaining market certainty.
The Economist Institute for Economic and Financial Development (Indef) Enny Sri Hartati said that if this could be implemented, in one policy, two benefits would be fulfilled, namely encouraging the creation of added value because it encourages the use of local raw materials, as well as import substitution.
However, Enny's tariff is in fact the import structure of the textile industry is currently reversed, the tariffs on the upstream and middle sides are higher from the downstream side. Even for downstream products originating from free trade partner (FTA) countries such as China, there is no imposition of import tariffs.
"In fact, almost all destination countries for Indonesian TPT exports are safeguards or BMTP for the protection of the domestic market, because they still have WTO permits," he said.
Enny said that the contradictory trade policies will have a huge impact on the absorption of national labor. Moreover, during the economic recovery, it requires a lot of jobs to fill the millions of workers who are victims of the pandemic.
If it is difficult to create employment opportunities, then the process of economic recovery will also be difficult. This is because the textile industry is a labor-intensive industry that can actually be a means of preventing unemployment from rising.
"Supposedly, it should be used as a momentum for reindustrialization by rearranging various policies comprehensively from upstream to downstream. This is of course for the purpose of accelerating the economic recovery process, the momentum of reindustrialization of the textile and clothing industry will obviously only succeed if accompanied by security or protection measures in the country," said Enny.