Posted on 02 Jul 2015
Exports to US to grow as tariff cut extended
Indonesia is expecting to boost its
exports to the US as the world’s biggest economy has recently renewed tariff
reductions on several products under its generalized system of preference
(GSP).
US President Barack Obama signed on Monday legislation which provides a legal
basis for an import tariff reduction on several products including some from
Indonesia.
The legislation is a renewal of a tariff system that expired nearly two years
ago.
Gusmardi Bustami, a special staffer to the trade minister, said Tuesday that
with the signing of the legislation, the shipment of manufactured goods was
expected to rise between 10 percent and 20 percent from around US$1.8 billion
seen last year.
“That measure will certainly give a major boost to our exports to the US, particularly
at this time when demand douses across the globe. This will help our producers
tap into the market where economic recovery is underway,” he told The
Jakarta Post in a phone interview.
Introduced in 1976, the tariff system has eased import duties on 4,800 items
that are mostly produced in 122 developing and least-developed nations, thereby
giving advantages for the country’s finished goods producers as well as
customers.
Indonesia was the fourth biggest beneficiary of US GSP after India, Thailand
and Brazil although it still lagged behind its peers in utilizing the facility.
The total value of goods that should have been covered by the facility in 2014
was $18.7 billion and Indonesia’s shipments accounted for $1.7 billion, or 8.8
percent, of the overall figure.
Topping the list of Indonesian products that have benefited from the GSP are
radial tires, wood products, rubber gloves, musical instruments, tires,
porcelain, palm oil products, jewelry and footwear, according to data from the
Trade Ministry.
The facility expired at the end of July 2013 and attempts to renew it were not
easy following a lengthy political process in US Congress.
Ultimately, President Obama signed the legislation which rules the GSP is
slated to take effect on July 29 and last until Dec. 31, 2017.
Gusmardi said that in line with the goal to raise export value, Indonesia would
also push diversification of products eligible for GSP to 1,000 items from 652
items previously with glasses, food and beverages included in the line-up.
Indonesian Footwear Association (Aprisindo) chairman Eddy Widjanarko welcomed
the US move, saying that the approval from the US government would provide
Indonesian exporters with certainty about the sustainability of the tariff
reduction.
He also said that without the discount, US importers would pass the duties
directly to Indonesian exporters, thereby forcing them to lower their prices.
“But, the GSP will not really help push up our exports to the US or enhance the
competitiveness of our footwear there,” Eddy said.
Indonesia’s exports to the US amounted to $19.4 billion last year, up slightly
by 0.8 percent from 2013.
From January to May, sales of goods to the country reached $6.4 billion, down
0.84 percent from the past year.
Indonesia
is expecting to boost its exports to the US as the world’s biggest
economy has recently renewed tariff reductions on several products under
its generalized system of preference (GSP).
US President Barack
Obama signed on Monday legislation which provides a legal basis for an
import tariff reduction on several products including some from
Indonesia.
The legislation is a renewal of a tariff system that expired nearly two years ago.
Gusmardi
Bustami, a special staffer to the trade minister, said Tuesday that
with the signing of the legislation, the shipment of manufactured goods
was expected to rise between 10 percent and 20 percent from around
US$1.8 billion seen last year.
“That measure will certainly give a
major boost to our exports to the US, particularly at this time when
demand douses across the globe. This will help our producers tap into
the market where economic recovery is underway,” he told The Jakarta Post in a phone interview.
Introduced
in 1976, the tariff system has eased import duties on 4,800 items that
are mostly produced in 122 developing and least-developed nations,
thereby giving advantages for the country’s finished goods producers as
well as customers.
Indonesia was the fourth biggest beneficiary
of US GSP after India, Thailand and Brazil although it still lagged
behind its peers in utilizing the facility.
The total value of
goods that should have been covered by the facility in 2014 was $18.7
billion and Indonesia’s shipments accounted for $1.7 billion, or 8.8
percent, of the overall figure.
Topping the list of Indonesian
products that have benefited from the GSP are radial tires, wood
products, rubber gloves, musical instruments, tires, porcelain, palm oil
products, jewelry and footwear, according to data from the Trade
Ministry.
The facility expired at the end of July 2013 and
attempts to renew it were not easy following a lengthy political process
in US Congress.
Ultimately, President Obama signed the
legislation which rules the GSP is slated to take effect on July 29 and
last until Dec. 31, 2017.
Gusmardi said that in line with the
goal to raise export value, Indonesia would also push diversification of
products eligible for GSP to 1,000 items from 652 items previously with
glasses, food and beverages included in the line-up.
Indonesian
Footwear Association (Aprisindo) chairman Eddy Widjanarko welcomed the
US move, saying that the approval from the US government would provide
Indonesian exporters with certainty about the sustainability of the
tariff reduction.
He also said that without the discount, US
importers would pass the duties directly to Indonesian exporters,
thereby forcing them to lower their prices.
“But, the GSP will
not really help push up our exports to the US or enhance the
competitiveness of our footwear there,” Eddy said.
Indonesia’s exports to the US amounted to $19.4 billion last year, up slightly by 0.8 percent from 2013.
From
January to May, sales of goods to the country reached $6.4 billion,
down 0.84 percent from the past year. - See more at:
http://www.thejakartapost.com/news/2015/07/02/exports-us-grow-tariff-cut-extended.html#sthash.zDZ4W7MH.dpuf
