JAKARTA (TheInsiderStories) - The United States Trade Representative (USTR) has officially extend the provision of Generalized System of Preferences (GSP) facilities to Indonesia, said senior minister end of last week. The decision was made just a day after secretary of state, Mike Pompeo met President Joko Widodo on Oct. 29 in Bogor Palace.
Coordinating minister for maritime and investment affairs, Luhut B. Pandjaitan, said in an official statement, the provision of this GSP facility will help to improve the performance of Indonesia’ exports to America. While, foreign minister, Retno Marsudi, stated that the completion of the GSP review was the result of a series of diplomacy that has been intensively carried out by the government in recent times.
“The provision of GSP facilities is a concrete form of strategic partnership between the two countries which not only brings positive benefits to Indonesia, but also business in the US,” added the the minister.
While, Indonesian Ambassador to the US, Muhammad Lutfi, stated, “After the announcement of the USTR, we will immediately compile a work plan or road plan to optimize import duty relief facilities for Indonesian export products in the US market.”
In recent years, the granting of extension of GSP facilities by the US has been relatively rare. Even a number of countries that are US trading partners, such as India and Turkey, in 2019 their GSP facilities have been terminated.
Pandjaitan revealed, Indonesia will propose to hold a Limited Trade Deal negotiation between Jakarta and Washington, which will cover trade cooperation, investment to the information, communication and technology sectors. Its expected the negotiation will help boost two-way trade between the two countries to reach US$60 billion by 2024.
GSP is a trade facility in the form of exemption from import duty tariffs, which have been given unilaterally by the US’ government to developing countries in the world since 1974. Indonesia first received GSP facilities from Washington in 1980.
Based on data from the US’ International Trade Commission, in 2019, Indonesia’ exports using GSP facility worth of $2.61 billion. This figure is equivalent to 13.1 percent of Indonesia’ total exports to the US, of $20.1 billion. Indonesia’ GSP exports in 2019 came from 729 goods tariff posts from a total of 3,572 product tariff posts that received GSP tariff preferences.
Until August 2020, the export value of Indonesian GSP to the US was recorded at $1.87 billion, an increase of 10.6 percent compared to the same period in the previous year. Indonesia is currently the second largest GSP exporting country in the US after Thailand ($2.6 billion).
Written by Editorial Staff, Email: theinsiderstories@gmail.com
