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Indonesia-US: Deepening trade relations beyond GSP
Indonesia is among the countries that have enjoyed the US’ GSP until recently.
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A ship discharges cargo at Bitung Cargo Port in North Sulawesi in October 2016. (Antara/Adwit B. Pramono)
T
he recent visit of the Indonesian trade delegation to Washington DC was described as a “smart move” by the United States, and the response from the US has been perceived as “promising to deepen trade relations” by Indonesia.
The Indonesian delegation visited the US late in July in response to an invitation from the head of the US Trade Representative (USTR) Robert Lighthizer to discuss a review of the Generalized System of Preferences (GSP). The Indonesian delegation was led by Trade Minister Enggartiasto Lukita.
The GSP is a preferential tariff scheme that allows entry to a market with 0 percent tariff rates, provided, typically, by developed countries to developing countries and least developed countries. The US has offered GSP tariff exemptions since 1976.
Indonesia is among the countries that have enjoyed the US’ GSP until recently. In 2017, Indonesia ranked 4th in terms of the value of exports under the GSP at US$1.95 billion, after India ($5.6 billion), Thailand ($4.2 billion) and Brazil ($2.5 billion). In 2017, Indonesia was eligible for 3,547 tariff lines (at the HS-8 digit level) through the US’ GSP, and 697 tariff lines of Indonesia’s exports entered to the US market under the GSP scheme.
