ASEANChina Free Trade Area (ACFTA) / Review By: Anastasia Winayanti Under the new accord, China and

the six founding ASEAN countries - Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand - are to remove tariffs on 90per cent of imported goods, covering 7,000 product categories. The other four Asean members, including Vietnam and Cambodia, will follow suit in 2015. Starting Jan. 1, these countries can import and export almost all goods across their borders at no tariff as the Common Effective Preferential Tariffs for ASEAN Free Trade Area (CEPT-AFTA) takes effect. Free Trade Agreements in the Intra-ASEAN Common Effective Preferential Tariff scheme of the ASEAN Free Trade Agreement (CEPT-AFTA) began in 1992. Then in the framework of the formation of the ASEAN Economic Community in 2015, it is changed into ASEAN Trade in Goods Agreement (ATIGA). The Free Trade Agreement ASEAN-China (ACFTA) was signed on 29 November 2004. The history and origin of the idea of the establishment of CAFTA has been agreed since the November 2001 ASEAN summit in the 7th in Bandar Sri Begawan, Brunei Darussalam. When it was approved, the establishment of ASEAN CAFTA in the next 10 years, which was formulated in the ASEAN-China Framework Agreement on Economic Cooperation which was ratified at the next ASEAN Summit in Phnom Penh, Cambodia, in November 2002. Since then many reviews popping up. One was from Sheng Lijun, a researcher from the Institute of Southeast Asian Studies (ISEAS) in Singapore in 2003. Lijun write a study report "China-ASEAN Free Trade Area: Origins, Development and Strategic Motivations". Sheng Lijun of China regarding CAFTA outlines ideas that can be traced backward in 1995, when the very first time in China to propose a special economic zone, which form a free trade zone (Free Trade Area / FTA) with China's southern provinces. Furthermore, CAFTA trade agreement was signed by ministers of Asean countries and China in 2004. CAFTA began with a proposal that was offered by Hu Jintao (Chinas Prime Minister) in 2001 and signed two years later (2004) in the ASEAN-10 Summit in Vientiane, Lao PDR. But as usual in Indonesia every policy always reaps a variety of perceptions and public controversy, that the entry into force of China-ASEAN Free Trade (CAFTA) caused anxiety, because it could

banish the domestic industry. Mass layoffs and ultimately, the national economy will become devastated. Even so, CAFTA will still run with the modifications imposed without violating the regulations. Minister of Industry, Minister of Trade and businessmen continue to meet to make the ways that domestic industry could face swift goods and services made in China. Faced with free trade, horticulture sector is not ready. There is still lack of competitiveness of its products. The productivity of plantations in Indonesia remains low and is seasonal. Minimal supporting infrastructure, high transportation costs. Farmers must bring the crops to town via damaged road, so that agricultural products were also damaged by shaking in a vehicle. Bank credit is also difficult to pour. Restricting imports also is clearly impossible. Therefore, the production of some specific commodities has not been able to meet domestic needs. Garlic, for example, is imported from China. Domestic production is very low, last year approximately only 10 thousand tons. That's all due to agricultural development is unclear. In fact, if the government seriously worked it out, Indonesia has a great opportunity to take advantage of this free trade agreement to export the fruit. Tropical fruits can be a flagship export, such as mango, mangosteen, pineapple, banana, rambutan, and salak. Unfortunately, production is still low. Free trade also added excitement to the telecommunication sector. Chinese products had created new opportunities in the telecommunications hardware industry. However, classes that are created remain at lower levels because the only power of Chinese products is the low price. If the price is more than Rp 2 million, the products will not able to compete. No less pleased by the cooperation between countries that are telephone operators. In the last two years, the service providers and businesses established intimate communication with mobile vendors through bundling packages. For example, one reason for selecting the operator Axis cooperation with Chinese products is the cheap price. As a result, the competition is likely to shift down. Conversely, the market of expensive product will be reduced. References: http://bisniskeuangan.kompas.com http://majalah.tempointeraktif.com http://www.free-7.net