JAKARTA (TheInsiderStories) – Indonesia and Palestine have signed a Memorandum of Understanding (MoU) on goods trade, through which both countries agree to free import duties on palm and olive oil products domestically. The deal is expected to come into effect early next year.

The signing of the Memorandum of Understanding was conducted on the sidelines of the 11th World Trade Organization (WTO) Ministerial Conference in Buenos Aires, Argentina last week.

The signing of the MoU was conducted by Indonesian Trade Minister Enggartiasto Lukita and Palestinian National Economy Minister Abeer Odeh. The amount of import duties of both products has been up to 5 per cent.

“On the basis of the MoU, the Finance Minister will immediately issue a Ministerial Decree on the exemption of import duties, which will come into force on January 1, 2018,” said Lukita on Wednesday (20/12).

With the signing of the MoU, import duty will be reduced to zero per cent. Furthermore, the Palestinian government will make a list of goods needed for importation and goods to be exported to Indonesia.

Some Indonesian products that have potential to be exported to Palestine include food and beverages, machinery and plastics.

“The next step: we will ask for a list, what products they have and will export (to Indonesia), then what they need to be exported from Indonesia,” he said.

The Indonesian government’s goal of lowering the import tariff is to open up market access for the Palestinians. It is a form of concrete Indonesian support for Palestine, which is in line with President Joko Widodo’s order.

President Joko Widodo gave the mandate to support Palestine both politically and economically. From a political perspective, Indonesia encourages the WTO to accept the Palestinian request to become a member of the WTO.

Indonesia has been actively courting support for Palestine in the wake of US President Donald Trump’s Jerusalem move, which marked the beginning of the process to relocate the US embassy in Tel Aviv to the contested Holy City.

Last week, the Organization of Islamic Cooperation – of which Indonesia is a member – called on the United States to reverse its decision recognizing Jerusalem as the capital of Israel and urged its member states to impose political and economic restrictions on the world’s biggest economy.

“The Palestine issue is not a religious issue. It is not only the interest of Indonesia to support Palestine, but it is in the interest of the world that justice could be implemented – justice works, justice matters, and we have to show that,” Foreign Minister Retno Marsudi said during a seminar in Jakarta.

Written by Elisa Valenta, email: elisa.valenta@theinsiderstories.com