Small and medium textile industries (IKM) feel threatened by the approval of the Indonesia-Bangladesh Preferential Agreement (PTA) trade agreement. Chairman of the Bandung Convection Entrepreneurs Association (IPKB) Nandi Herdiaman said entrepreneurs are enjoying the domestic market after a number of domestic market policies were implemented. The trade agreement with Bangladesh, if not carefully negotiated, is feared to damage the domestic market, which is the foundation for the recovery of textiles and textile products this year.
“We have been flooded with orders since the beginning of this year. This is due to the opening of offices and face-to-face meetings at schools so that new uniforms are needed. We also still need more tailors to pursue the target until this year's Eid," said Nandi, Friday (4/3/2022).
If garment imports come in again, he continued, it will again burden SMEs and erode the competitiveness of domestic products. Nandi said it was not impossible that there would be another production shutdown due to the onslaught of imported products.
"People will prefer cheap imported products compared to IKM products. They might close one by one again like at the beginning of the last pandemic," he said.
Meanwhile, the Executive Director of the Indonesian Association of Textile Experts (IKATSI) Riza Muhidin explained that the phenomenon of the flood of IKM orders was due to a number of legalized trade remedies, one of which was the apparel safeguard.
“This apparel safety guard needs to be optimized. In the safeguards, Bangladesh is also excluded, so the threat of cheap imported goods is something that will definitely happen if the IB-PTA is legalized," said Riza.
He also added that the effect of the legalization of the IB-PTA will have an impact on the domestic textile upstream and downstream textile industries. In fact, the textile industry has targeted new investments this year.
“The IB-PTA domino effect will not only be felt by garment manufacturers, but the fiber, yarn and fabric industry will also be affected. It seems useless if this year's TPT investment target coincides with the ratification of the IB-PTA," he said.
Riza hopes that a conducive and competitive business climate can now be maintained. He also advised the government to first take care of the industry's unresolved challenges, such as the high cost of containers and shipping, rising energy costs, and illegal textile imports.
Starting in January 2018, the IB-PTA negotiations are still ongoing and are expected to be completed this year.
