Representatives from the Indonesian Textile Association (API) say they need more time to restore the industry before the Asean Free Trade Area (AFTA) agreement comes into force next year. Under AFTA, import tariffs on textile products will be reduced to between zero and five per cent in a bid to boost regional trade.

The six original members of Association of Southeast Asian Nations (ASEAN) - Malaysia, Thailand, Indonesia, Brunei, the Philippines and Singapore - started the gradual implementation of AFTA earlier this year, but API wants the government to stall for time until the local textile industry is ready to compete with foreign players.

Lili Asdjudiredja, an executive at API, told The Jakarta Post that domestic policies such as unfavourable labour laws, high interest rates, high wages and the absence of tax incentives make Indonesian textile products less competitive.

Sunjoto Tanudjaja, head of international relations and foreign trade at API, wants AFTA to be delayed for at least another three years to give the industry time to recover. This would also give it time to prepare for global free competition from 2005.

Sunjoto said that the government currently applies an average tariff of 20-30 per cent for textile products.