T

he United States may ease import barriers for crude palm oil (CPO) as compensation for Indonesia’s acceptance of a hard-fought consensus formed over a list of environmental goods subject to tariff caps.

Trade Minister Gita Wirjawan said on Friday that the US would consider the proposal to ease environmental standards for the
import of CPO, but could not immediately help to include the commodity in the list of “green” goods agreed upon during a ministerial meeting of Asia-Pacific Economic Cooperation (APEC) on Thursday.

The US Environmental Protection Agency (EPA) added Indonesia’s CPO to its imported commodities’ blacklist in January this year based on allegations that Indonesia’s CPO produced higher carbon emissions than agency’s regulations allowed.

“They have agreed to bring the issue to higher levels in Washington, agreeing that CPO is among Indonesia’s unique [products] that should be given [leeway] as a concession for backing the green goods pact,” Gita said.

“We’ll see within one or two months whether there will be progress in the US’ attempts to help us on that,” he said.

Indonesia is the world’s largest producer of CPO — a commodity often used as basic ingredient in making soap, perfume and cooking oil. Indonesia’s CPO exports to the US account for around US$8 billion of the total $23 billion exported, according to Gita.

“Aside from the market perspective, a decision by the US to ease the barrier would set a precedent for other developed countries to follow suit because traditionally, the US is the trendsetter,” said Gita.

Ministers of 21 APEC member economies forged a consensus on Thursday to support the US-initiated proposal to include 54 environmental goods in the list of products subject to tariff caps by 2015.

The pact was made amid opposition from Indonesia and Vietnam, who insisted on having fewer goods covered and wanted developed nations to give further consideration to their counteroffers in exchange for supporting the policy.

After the final ministerial meeting, which was colored by heated debate over the policy, Russian Economic Development Minister Andrey Belousov announced on Thursday that APEC member economies would undertake a commitment to cut customs duties to 5 percent by 2015 for the 54 categories of goods.

However, should an APEC member overturn the consensus during the leaders meeting on Saturday and Sunday, the pact could not be adopted, Belousov added.

Gita said that aside from CPO, Indonesia’s also demanded the US and other developed nations to invest in manufacturing green goods in Indonesia in exchange for its support of the pact.

“We also want them to help us build capacity to produce green goods and to meet environmental standards.”

According to Gita, the 54 categories would cover 157 items, 10 of which already have a zero percent tariff, 131 items that have a 5 percent tariff and only 16 products that are still subject to a 10 percent tariff.

Meanwhile in Jakarta, the Finance Ministry’s interim fiscal agency chief Bambang Brodjonegoro said that the government would intensify its lobbying efforts for free trade agreements (FTAs) after the failure to include CPO on the list of APEC’s environmental goods.

“We have many FTA schemes, such as the ASEAN Free Trade Area [AFTA] among others. We are also planning to negotiate a bilateral FTA deal with Pakistan in which we are going to bring our CPO export levy to stand at zero percent,” he told reporters here Friday.

“ASEAN countries also have an FTA deal with Australia and New Zealand. We might also consider cutting the levy on our CPO exports to zero percent using this deal. Basically, there are still many doors available for Indonesia to export its CPO,” he added.