Indonesia fears its textiles industry could suffer sanctions from the US over the Chinese transhipments issue.

In 2005 there appears to have been at least 32 cases of textiles transhipments from China to Indonesia, and then on to the United States and Latin America, done in order get around the import restrictions on Chinese made textiles in the US and its neighbours.

The Director of the Indonesian Textile Association (API), Ernovian G. Ismyketika, said that it was likely that such shipments had continued to occur in 2006. Speaking in Jakarta on the 24th Ernovian said that he suspected the Indonesian surveyor company Suconfindo as being involved in the transhipment of Chinese textile products to Mexico by the use of faked official statements from the trade representative office of Karawang district.

In fact, the seven official statements issued by the Karawang district trade office turned out to be fake, because according to the record of the Import Director of the Trade Ministry, in 2005 there were no such official statements from the Karawang district trade office.

On the matter of transhipments to the United States he said 25 official statements had been issued by Jakarta, Bali and West Java.

We received this information from the US customs office. We have asked the police to process the case.

He said that the transhipments did not benefit the domestic textiles industry at all and he worried that if transhipments continued Indonesia could be subject to sanctions.

On the 27th of September Trade minister Mari Elka Pangestu, overseen by vice president Jusuf Kalla, signed a memorandum of understanding with the United States’ government to increase cooperation in combating transhipments of foreign textiles from Indonesia.

According to US Department of Trade figures the total value of trade between the two countries was in 2005 $15.06 billion, up from $12.48 billion in 2004 and $12,04 billion in 2003. Of the $15.06 billion number $12.02 billion consisted of Indonesian exports to the United States while $3.04 billion was American exports to Indonesia. The textiles sector accounted for $3.13 billion of Indonesian exports, a rise of 18.8% on that of 2004.