INDONESIAN GOVERNMENT’S EFFORTS TO MANAGE THE ASEAN-CHINA FREE TRADE AREA: PROTECTING DOMESTIC MARKETS ON TEXTILE AND TEXTILE PRODUCTS (2004-2011)

Abstract

This research is aimed to analyze Indonesian Government’s efforts in protecting the domestic market and increasing the industry competitiveness especially in textile and textile products as the impact of ACFTA. This research discusses the process of ACFTA establishment since coming up the idea until its implementation in 1 January 2010. This research shows that ACFTA had given the negative impacts on domestic industry especially on textile and textile products in which becoming one of industries experienced the significant impact of ACFTA agreement. The Government’s efforts in protecting the domestic market and increasing the industry competitiveness especially on textile and textile products were less effective in the implementation. This caused the domestic products lost the competition with Chinese products so that making several industries especially textile and textile products stopped producing their products moreover they even change their profession from domestic industry actors to be Chinese product traders. Therefore the importance of Government in analyzing and creating the more effective efforts to protect the domestic market and to increase the industry competitiveness to produce the products that can compete with Chinese products which are cheaper with good quality.