The government says the Indonesia-Bangladesh Preferential Trade Agreement (PTA) will have no negative impact on the country's footwear industry. According to the director of the textile, leather and footwear sector of the Ministry of Industry, Elis Masitoh, the agreement is irrelevant for the footwear sector, as Bangladesh has not revealed a plan to export shoes to Indonesia. However, "As we are both producers, the negotiations have the potential to disrupt our local sector," said Firman Bakrie, executive director of Aprisindo.
"PTA RI – Bangladesh has no request from Bangladesh to market its products in Indonesia," Elis told Bisnis on Monday (23/5/2022).
Note that the domestic production capacity of footwear reaches 1.29 billion pairs and places Indonesia as the 4th largest footwear producer in the world.
In addition, the footwear industry is an industry that contributes to foreign currency exports and absorbs many workers. This sector absorbs more than 700,000 workers with an export value of 5.12 billion dollars.
Achieving investment targets in Indonesia's leather and footwear industry faces a number of challenges. One of the biggest is competition from producing countries such as Bangladesh. That is why in Presidential Decree no. 74/2022 on the National Industrial Policy (KIN), the government set an investment target of 21.7 trillion IDR per year in the implementation phases for the period 2022 - 2024.
However, this goal could be disrupted by the planned negotiations on the Preferential Trade Agreement (PTA) between Indonesia and Bangladesh. As these are among the largest footwear producing countries in the world and the Indonesian Footwear Association believes that the trade opening agreements with Bangladesh could potentially upset the structure ofthe domestic industry and have a domino effect on investment flows.
"Since we are both producers, the negotiations have the potential to disrupt our local sector," Firman Bakrie, executive director of the Indonesian Shoe Association (Aprisindo), told Bisnis newspaper.
