Jakarta (ANTARA) - The trade tariff agreement between the United States and Indonesia is expected to improve the performance of some domestic sectors, Finance Minister Sri Mulyani Indrawati said here on Monday.Speaking at a press conference, she noted that the government has successfully negotiated with the US to bring the reciprocal tariff rate down from 32 percent to 19 percent. This is expected to encourage the performance of sectors such as textile, footwear, and furniture, she expounded.
“Moreover, import with zero percent tariff of US products is estimated to push down prices of oil and gas and food products, so they are lower,” she said.
According to the official White House website, the US and Indonesia have agreed on the framework of the Agreement on Reciprocal Trade to strengthen bilateral economic relations.
Under the agreement, Indonesia will remove nearly 99 percent of tariff barriers for several industrial and agricultural products from the US.
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In return, the US will impose a reciprocal tariff of 19 percent on Indonesian products and open the possibility of further tariff reductions on commodities that are not available or not produced domestically in the US.
According to Coordinating Minister for Economic Affairs, Airlangga Hartarto, Indonesia is seeking a further reduction in the import tariff on national strategic commodities, such as oil palm, cacao, agro products, mineral products, and aircraft components.
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Hartarto said that although the current tariff is 19 percent, there is room for more negotiations to reduce the rate for strategic commodities and items that do not directly compete with US products.
The US will also pay attention to tariffs from other trading partners such as the European Union, which, through the Indonesia-European Union Comprehensive Economic Partnership Agreement (I-EU CEPA), has set a zero percent tariff for crude palm oil (CPO) from Indonesia, he added.
