Fears imported goods will ‘ruin prices’
Furniture Today, December 30, 2009 — The head of an Indonesian furniture association has asked for a delay in the implementation of a new free trade agreement with China, the Jakarta Post reported.

The paper quoted Ambar Tjahjono, chairman of the Assn. of Indonesian Furniture and Handicraft Exporters (Asmindo) as saying the ASEAN-China Free Trade agreement would increase imports of cheap Chinese-made goods and would hurt furniture producers in Southeast Asian countries.

Assn. of Southeast Asia Nations members include Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The agreement, which would take effect Jan. 1, would ease trade barriers that currently restrict the flow of goods and services between China and the ASEAN countries.

Governments in the region have worked for years to ease trade restrictions, including the reduction of import duties. An estimated 7,000 items will be tariff free by Jan. 1, according to the People’s Daily Online.

Asmindo has lobbied to modify or suspend at least five of 12 proposed tariff changes associated with furniture, the Jakarta Post reported.

In the article, Ambar said that China’s “cheap and low quality products would bring a serious threat to the domestic market.”

“They would ruin the prices,” he told the paper. “We are not ready yet to face them.”

The issue comes during a period of intense competition for the ASEAN member nations. Through September, they had experienced a $74 billion trade deficit with China, according to the New York Times.

How the issue unfolds could be of interest to a growing number of U.S. furniture importers that have begun to source more finished goods from Indonesia and other nearby countries. Should those products become less competitive, it could disrupt sourcing activity in the coming year.

Source: Furniture Today