INDONESIA has initiated a safeguard investigation regarding its import of apparel products that may negatively affect Bangladesh’s export of the products to the Southeast Asian country. Indonesian Safeguard Committee of the Ministry of Trade on Friday notified the issue to the World Trade Organisation. The committee said that it initiated the investigation regarding the import of the articles of apparel and clothing accessories following an application from the Indonesia Textile Association for safeguard measures against the import of the products. The move, though not any country-specific, came at a time when both Bangladesh and Indonesia is in negotiations to enter into a preferential trade agreement (PTA).
The latest development may affect the negotiation process as well as Bangladesh’s export to the country if Indonesia finally imposes any safeguard duty after the investigation is completed. Bangladesh in the last fiscal year 2019-2020 exported readymade garment products worth $27.91 million to Indonesia, which is more than 54 per cent of the country’s total export of worth $51.42 million to Indonesia. Of the $27.91 million, the value of knitwear products export was $14.48 million and the amount of woven export was $13.44 million. According to the WTO, a safeguard investigation seeks to determine whether increased imports of a product is causing or is threatening to cause, serious injury to a domestic industry.
During a safeguard investigation, importers, exporters, and other interested parties may present evidence and views and respond to the presentations of other parties. Though the safeguard investigation was not any country-specific move, it would create trouble in the PTA negotiation process. There is no provision in the draft PTA of excluding Bangladeshi products from such types of duties.
Signing a PTA will not bring any expected outcome for Bangladesh if such duty is imposed as RMG products dominate Bangladesh’s export to Indonesia. As ASEAN is projected to grow into the 4th largest economy by 2030, Bangladesh should explore fashion wear suited for the Muslim population in the region. For the sake of both market and diversification, Bangladesh should not lose focus on the ASEAN market.
