Indonesian textile exports face fierce competition
According to Indonesia’s “Jakarta Post” report on January 4, Indonesian Textile Industry Association Chairman Ade recently stated that although Indonesia’s textile exports increased by 5% year-on-year to US$12.4 billion in 2017, export growth in 2018 is likely to slow down. , mainly due to the fierce competition from Vietnam and other countries. Clothing exports account for about 70% of Indonesia’s total textile exports, most of which are exported to the United States, followed by the European Union, Japan, South Korea, and the Middle East. Since Vietnam signed a free trade agreement with the EU, its textile exports to the EU have zero tariffs, while Indonesian products are subject to 11% tariffs, which greatly weakens competitiveness. Indonesia is currently negotiating a Comprehensive Economic Partnership Agreement with the European Union, which is expected to be signed in 2019 and implemented in 2021. Ade pointed out that in order to enhance competitiveness, Indonesia needs to further reduce production costs such as electricity, gas, and labor, and improve production equipment. However, limited capital investment and a lack of skilled workers have become major constraints. According to the WTO, global trade will grow by 2.1-4% in 2018, higher than the 1.8-3.6% growth in 2017. Indonesian textile exports face fierce competition in 2018
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