Indonesia’s safeguard duty may obstruct proposed PTA with BD
The Indonesia government's safeguard duty on import of readymade garment from Bangladesh and similar RMG exporting countries like China, Vietnam and Singapore is directly conflicting with the proposed Preferential Trade Agreement (PTA) Dhaka is now negotiating with Jakarta.
Indonesia is going to impose the safeguard duty following a notification by WTO on February 23 that said the country would come in next 90 days in the interest of safeguarding local textile industry.
A country can impose safeguard measures if excessive import threatens its domestic production, the WTO rules said.
Reacting on the development Md Jahangir Alam, convener of Swadinata Parishad and a leader of the garment industry said we know that Indonesia is a competitor of Bangladesh and a rival in global export market for apparel goods.
While Bangladesh is the second largest exporter after China, Indonesia is the 5th largest in this global trade. So it is natural that the country would try to protect its domestic producers and there is nothing unusual about it.
Bangladesh is negotiating a preferential trade agreement with Indonesia with the hope that both countries would benefit mutually. Despite competition many trade facilities things may be achieved through negotiation, he said.
Another BGMEA leader said Bangladesh as a least developed country enjoys duty-free market access to Indonesia for some exports except RMG exports. However Bangladeshi exporters have to pay 25 percent duty on exporting apparel items to the country.
The new safeguard duty will be ranging from $0.44 to $11.29 per piece on readymade garments (RMG) from Bangladesh and other top regional exporters. It will include top garments of all types, bottom garments, suits, ensembles and dresses, outwear, babies' garments, clothing accessories and headwear and neckwear.
Jakarta is making the decision to address the demand of the local garment makers who feel they are hurt by exports from the regional countries. The industry sources said Bangladesh Commerce ministry has made an appeal to the Indonesian government and it is set to take part in a hearing on March 19.
Earlier a delegation of commerce ministry, Bangladesh Tariff Commission and representatives of BGMEA took part in a similar meeting in November last year but industry sources said Indonesia rejected the viewpoints Bangladesh made in that meeting.
Indonesia is the 5th largest producers and garment exporter in the world which earned 14 billion from textile goods export in 2019.