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Jakarta Post

'Not worried': Airlangga Hartarto downplays US' revocation of Indonesia's developing nation status

  • News Desk

    The Jakarta Post

Jakarta   /   Sun, February 23, 2020   /   09:09 am
'Not worried': Airlangga Hartarto downplays US' revocation of Indonesia's developing nation status Shipping containers are stacked on a ship docked at Yusen Terminals on Terminal Island at the Port of Los Angeles in California, the United States, on Jan. 30. (Reuters/Mike Blake)

Coordinating Economic Minister Airlangga Hartarto says the United States' decision to no longer recognize Indonesia as a developing country would not affect the country much, despite the potential effects the decision would bring.

“We will receive fewer facilities and benefits as we’re no long recognized as a developing country. However, we’re not worried about that,” Airlangga said on Friday, as quoted by kontan.co.id.

The US Trade Representative Office revoked the special preferences for Indonesia and other developing countries in the World Trade Organization, meaning that the US recognized Indonesia as a developed country.

According to the policy issued on Feb. 10, Indonesia was excluded from the developing and least-developed countries list, making the country no longer eligible to receive Special Differential Treatment (SDT) from the WTO’s Agreement on Subsidies and Countervailing Measures.

The decision would open exported goods from Indonesia to be charged with higher tariffs compared to exported goods from developing countries.

Read also: Government upbeat US will maintain GSP status for Indonesia

The new policy would lower the de minimis thresholds to less than 1 percent as opposed to less than 2 percent in the previous policy. The threshold refers to the value of imported goods below which no duty or tax is collected.

Moreover, Indonesia would no longer be eligible for the negligible import volumes criteria.

“However, things are still up in the air; therefore, we’re not worried,” Airlangga said.

According to Statistics Indonesia, the trade surplus between Indonesia and the US in January was US$1.01 billion – increasing from the $804 million surplus in the same period last year.

The agency also highlighted that the US had become Indonesia’s second largest non-oil products export target with a $1.62 billion surplus last month.

Separately, the Trade Ministry said the US’ decision would affect its assessment of Indonesia’s Generalized System of Preferences (GSP) status.

“This is related to trade remedies rather than the GSP status,” said the Trade Ministry’s bilateral negotiations director, Ni Made Ayu Marthini, as quoted by kontan.co.id. (dpk)