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Cosmetics Association Asks for Exemption From FTA
Antara | December 20, 2009

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Indonesian cosmetics and herbal medicine producers are calling for an exemption for their products from the Asean-China free trade agreement.

“We want the implementation of the Asean-China FTA postponed until there is a strict supervisory system on cosmetics and jamu [herbal medicine] imports, especially those from China,” said Putri K Wardani, chairwoman of the industrial section of the Indonesian Cosmetic Association (Perkosmi).

“It is not because we are not ready. The question is our products are even now having to compete with illegal Chinese imports which are usually cheaper but of questionable quality.”

Putri, who is also chief executive of PT Mustika Ratu, a maker of traditional cosmetics and jamu, or herbal medicine, said in 2008 the cosmetics trade in Indonesia was worth a total of Rp 30 trillion ($3.18 billion), and the jamu trade Rp 6 trillion to Rp 7 trillion a year.

But now lower-priced Chinese products made up almost half of the market for cosmetics and jamu, she said.

Putri said Chinese products were able to dominate the domestic markets mainly because of their much lower prices. But unlike exported Indonesian goods, the Chinese goods generally did not carry proper or understandable labels, she claimed.

She called on the Health Ministry’s Food and Drug Monitoring Agency (BPOM) to conduct quality checks on all cosmetics and jamu products.

The customs office should also be involved in the examinations to determine the legality of the products in the market, Putri said.

The Asean-China Free Trade Agreement (FTA) is to come into force on Jan. 1. But not all of Indonesia’s production sectors are ready to compete with Chinese products.

According to the Coordinating Ministry for the Economy, of the approximately 2,500 production sectors in Indonesia, 303 are considered still unable to survive under the FTA.

Among the products still lacking competitive capability were cosmetics, textiles, steel, electronics, tires, furniture, cocoa processing, health care instruments, aluminium, upstream petrochemicals, sheet glass, footwear, machine tools and motor vehicles.