Jakarta eyes trade with poor nations

Deputy Trade Minister Bayu Krisnamurthi said in Jakarta on Wednesday the planned duty-free tariff preference scheme would cover key products such as cotton and wheat. “We expect that the scheme will include commodities and goods with wide impacts on the LDCs to ensure it benefits them,” he told reporters in his office.

Apart from that, the country would also consider putting on the list raw materials necessary for local industry that many of the LDCs could supply, Bayu added.

At present, Indonesia imposes import tariffs of an average of 6.8 per cent on goods and commodities.

Indonesia’s commitment is part of the efforts made by developing-country members of the World Trade Organisation (WTO) to provide wider market access for products from the world’s poorest economies. This follows on the heels of similar commitments made by most WTO members in the developing-country category.

India, for instance, has expressed its commitment to apply the preference scheme to 14 LDCs since August 2008, gradually removing duty from 85 per cent of tariff lines over a period of five years to cover products like cotton, cocoa, cane sugar and ready-made garments. China has also offered duty-free status for 60 per cent of overall tariff lines.

Bayu said the Indonesian government was still mapping out how many tariff lines would be removed under the duty-free facility, as well as how many LDC countries would be covered. He said that it would likely range between 32 per cent and 95 per cent, or within the same range pledged by Taiwan and South Korea respectively.

The implementation of the commitment might happen as soon as next year after the conclusion of the ninth WTO Ministerial Conference in December to be hosted by Indonesia in Bali, according to Bayu.

The duty-free and quota-free preferences are part of the Doha Ministerial Declaration signed in 2001 by the members of the ruling body for world trade.

During the WTO ministerial conference in 2005 in China, ministers vowed to implement the facilities starting in 2008 for at least 97 per cent of products from LDCs, the poorest and weakest tiers of the international community. The WTO uses the LDC criteria as designated by the United Nations and on those grounds, there are now 49 such countries across the globe, 34 of which have so far entered membership of the WTO. 

Indonesia’s initiative comes ahead of the Bali conference, during which it will seek to balance the interests of developed countries, developing countries and LDCs.