THE ASEAN-CHINA FTA: MANUFACTURER ASSOCIATIONS’ VIEWS ON IMPACTS TO THE ASEAN TEXTILE AND CLOTHING SECTOR

The ASEAN China Free Trade Area (ACFTA) came into effect on January 1, 2010. Since the enactment of the ACFTA, China is expected to benefit from a zero-tariff treatment or lower trade barriers from ASEAN countries. The ACFTA will open a huge export market to China. The major issue of the ACFTA is to what extent members of ASEAN are able to compete with cheaper Chinese goods in the regional market. ASEAN and China each possess similarities in the production and export of goods, particularly manufactured goods that include the textile and clothing sector. The ACFTA will influence competitiveness and comparative advantage among members of ASEAN in the textile and clothing (T C) industry. Manufacture and trade associations (or business chambers) of the ASEAN T C industry in particular have warned that the ACFTA would cause significant damage to the ASEAN T C sector. Members of ASEAN are incapable of competing with Chinese T C products. The main objectives of this study is to investigate the impact of the ACFTA on the textile and clothing industry based on manufacture associations within the textile and clothing industries of three main members of ASEAN namely Indonesia, Malaysia and Thailand.