JAKARTA. Indonesia is hopeful that some of its agriculture products will be included on the new list of goods subject to tariff reductions under the Asia Pacific Economic Cooperation (APEC).
Indonesia has submitted 15 items covering palm oil, rubber, pulp and paper products, out of the total list of 150 items under the assessment of APEC’s Policy Support Unit (PSU), for their potential to contribute toward poverty alleviation, rural development and sustainable growth.
The Trade Ministry’s director general for foreign trade cooperation, Bachrul Chairi, said he hoped that the new list would recognize the specific contribution of agriculture yields, including those from Indonesia, to the economies of the 21 APEC member countries.
The agriculture sector accounts for 20 percent of Indonesia’s gross domestic product and absorbs approximately 40 percent of the workforce in Southeast Asia’s biggest economy.
“The previous [environmental-goods] list was passed without a thorough study and somehow it got lost in translation,” Bachrul said.
“But this current list is a so-called ‘development list’. It accommodates particular contributions to developing local resources and reducing poverty, among the most basic principles for a country’s development,” he added.
Indonesia proposed a study on goods that could help reduce poverty, develop rural areas and grow a sustainable economy, when it hosted the APEC Summit last year, following its failure to garner sufficient support from the majority of members to expand the environmental-goods list approved in the previous summit in Vladivostok, Russia, in 2012. The 2014 Summit opted to keep the list until 2015 before expanding it.
The environmental-goods list comprises 54 products, such as solar panels and wind turbines, which will receive reductions of tariffs to 5 percent or less by the end of next year, the first and only multilateral arrangement to cut tariffs in the last 17 years.
This list accounts for up to US$500 billion of world trade. More than 70 percent of the list focuses on opening trade in goods that generate renewable energy, are utilized for environmental monitoring, analysis and assessment, or strengthen air-pollution control.
Despite the sizeable market that these goods could access more easily with lower tariffs, the list has been dominated by manufactured goods mostly produced by developed economies plus China, while developing economies like Indonesia do not get similar leverage. This situation underlines the importance of the new list.
Bachrul said that the study of the new goods list would be completed by the middle of next year and the APEC’s PSU was scheduled to report its progress during the upcoming summit in Beijing, China, next month.
“If our products can be accepted onto the list, other products that comply with the requirements may also be added,” he concluded. (Linda Yulisman)
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