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Minister of Industry Fahmi Idris said on Tuesday that Indonesia should submit a proposal for the postponement of the newly signed Asean free trade agreement with China before it comes into effect next year.

The Asean-China Free Trade Agreement was signed in Bangkok on Saturday, and is binding on Indonesia as a member of the 10-nation association.

“We are not ready to participate in the China FTA as we know that our products cannot compete with Chinese products,” Fahmi said.

He said that three industrial sectors would find themselves under threat — textiles, machine tools and steel.

“Whatever it takes, I will say the same thing. We have to postpone the entry into effect of the agreement next year,” Fahmi said, adding that he planned to soon hold talks on the issue with Trade Minister Mari Pangestu.

The Asean-China FTA process consists of three stages: an FTA on goods, which was signed in mid-2005 but comes into effect in stages; an FTA on the services sector, which took effect in 2007; and finally an FTA on investment, which was signed on Saturday and is due to come into effect at the start of next year. A free-trade agreement between Asean, Japan, South Korea and China would lift Southeast Asia’s economic growth by 3.6 percent, the grouping said. In addition, GDP in Japan, South Korea and China would rise 0.9 percent.

A broader trade deal that included India, Australia and New Zealand would boost Asean’s GDP by 3.8 percent, while growth in all 16 nations would increase by an average of 1.3 percent.

In addition to the China deal, Asean last week signed an agreement with India that would remove or reduce tariffs on most traded goods.

The Indonesian Textile Association’s deputy chairman, Ade Sudrajat, said the textile industry had complained about the FTA issue for some time.

“Whatever happens, the FTA enters into effect next year and we have to be ready for it,” Ade told the Jakarta Globe by text message on Tuesday.

Trade and industry commentator Sri Adiningsih said that the government’s decision to support the FTA was premature given the structural weaknesses in the domestic industries. “I did some research two or three years ago about how ready our industries were for global FTAs, and the findings were that many of them were not ready,” Sri said.