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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


Indonesia: Govt to boost exports through trade deals

Wednesday, January 20, 2016 > 09:48:57

(Jakarta Post)

The government aims to increase non-oil and gas exports in the coming years through trade deals and deregulation policies in an effort to reverse the recent export decline.Trade Minister Thomas Lembong said on Monday that his ministry targeted to boost the non-oil and gas export value by 9 percent this year and to accelerate export growth to an annual rate of 11.5 percent within three to four years.

“Personally, I’ll be happy if our trade balance is stable. If there’s no contraction or only a little contraction this year, that would already amount to a turnaround,” he said in a press briefing.The country’s non-oil and gas exports contracted by 9.77 percent to US$131.7 billion last year, while non-oil and gas imports slumped by 12.32 percent to $118.13 billion.

Total exports dropped by 14.62 percent to $150.25 billion last year, but imports plunged at an even faster rate of 19.9 percent to $142.74 billion, helping the country book a 2015 trade surplus of $7.51 billion.

It was the first trade surplus after deficits recorded in the previous three years, though it was weaker than the 2011 surplus.

Thomas said last year’s trade surplus was not satisfactory, as both exports and imports had weakened. He attributed the trade slump to the fall in commodity prices and weakness in major economies, such as China.

“Many of our non-oil and gas exports rose in terms of volume, but the prices slumped, driven by the global commodities slump and China’s economic transformation,” he said.Central Statistics Agency (BPS) head Suryamin said recently that rising commodity prices in December last year helped the country’s non-oil and gas exports rise by 6.98 percent in December from November.

He added that key Indonesian commodities like crude palm oil (CPO) and rubber still had traction in foreign markets.Thomas said the Trade Ministry would try to enhance exports of textiles, garments, footwear and processed food in an attempt to reach the 9 percent target, besides maintaining global traction for the country’s commodities.

“[We want to particularly boost] sectors that remained prominent despite the global economic downturn,” he said.

Thomas added his ministry also aimed for significant progress in opening more export markets through agreements with a number of trading partners.The government would soon resume negotiations on a comprehensive economic partnership agreement (CEPA) with the European Union and a European Free Trade Area (EFTA) with non-EU members Switzerland, Norway, Iceland and Liechtenstein.

Iman Pambagyo, the Trade Minister’s special staff member for international trade policy, said the ministry would prioritize negotiations on EFTA, EU-CEPA, the regional economic partnership agreement (RCEP) and a bilateral agreement with Australia.Iman added that EFTA talks had progressed to 80 percent and that Indonesia aimed to attract more investment from the four EFTA countries.

“However, they [EFTA countries] are also looking at the investment regime in Indonesia,” he said.The government was pushing for lower import tariffs on Indonesian processed agricultural goods exported to EFTA countries, while those countries expected lower import tariffs on their manufactured goods, he went on.

According to Iman, EFTA countries currently impose price compensation measures, in which imported agriculture products, including those from Indonesia, were subject to total import duties of 40 percent.

Thomas added that the government would continue to carry out deregulation measures to ease export and import activities, after deregulating a total of 32 regulations as stipulated in the government’s first economic policy package launched in September last year.

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