Jakarta ready to cut tariff provided it gets free access to EU markets
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Indonesia is ready to lower the tariff it imposes on commodities from European countries as long as they also allow Indonesian products to enter the European market, an economic minister said.
So far, several Indonesian commodities are restricted from entering the European market because they fail to meet strict standards.
Trade Minister Gita Wirjawan said yesterday that the country wanted open access for its commodities such as cocoa, rubber and crude palm oil on the European market so that free trade with the European Union (EU) could proceed.
“We are willing to impose minimum tariffs. It depends on their demands. We just don’t want our products [to be denied entry into Europe] as they are classified as not being environmentally friendly,” Gita told reporters on the sidelines of a business luncheon with representatives from the German Embassy in Indonesia on Monday.
The minister emphasised that Indonesia wanted free trade with Europe, commonly known as the Comprehensive Economic Partnership Agreement (Cepa), to proceed this year, saying it would bring huge economic benefits for the archipelago.
The fact many Indonesian products still face difficulties in entering the European market, however, disturbs the negotiation process.
Indonesia-EU talks on the Cepa will begin this year with the agreement expected to eliminate over 95 per cent of import tariffs on goods and improve bilateral investment.
Indonesia wanted negotiations on the Cepa completed this year, Gita said. Talks should have already concluded when EC president Jose Manuel Barosso visited Bali in November last year. But, at that time the issue was not raised as Barosso unexpectedly had other more pressing issues to address, Gita added.
“Negotiations on the issue must be held,” he said. “It can take one year, four years, [that is not a problem] as long as our products can meet the ‘sustainably developed’ requirements – whether it is palm oil, forestry products such as rubber and cocoa, or others.”
Indonesia saw a trade surplus of $3.89 billion with the EU throughout 2012, although it suffered a trade deficit with several countries, notably Germany and France.
