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Jakarta Post

Indonesia signs ASEAN agreement to reduce non-tariff barriers for essential goods

  • Dzulfiqar Fathur Rahman

    The Jakarta Post

Jakarta   /   Wed, November 11, 2020   /   05:06 pm
Indonesia signs ASEAN agreement to reduce non-tariff barriers for essential goods The flags of ASEAN member states. (Shutterstock.com/Thapakorn Hemgo)

The government has joined the other members of the Association of Southeast Asian Nations (ASEAN) in signing an agreement on relaxing non-tariff measures (NTM) for the trade of essential goods during the COVID-19 pandemic.

Indonesia signed the memorandum of understanding (MoU) on Tuesday. The MoU will be valid for the next two years and cover trade for 152 medical products.

The goods included in the agreement are those directly used for pandemic handling. Food is excluded as it was deemed a sensitive subject, said Antonius Yudi Triantoro, the director of ASEAN negotiation at the Trade Ministry.

“In short, the MoU seeks to reduce NTMs for essential goods,” Yudi told The Jakarta Post in a phone interview. “The 152 products are the result of negotiation, so [the deal] can serve our export interest and our import interest as well.”

The virtual signing of the trade agreement took place in the middle of a busy week for ASEAN, which is scheduled to kick off its 37th  summit on Thursday, as well as the expected signing of the Regional Comprehensive Economic Partnership (RCEP) with Australia, China, Japan, New Zealand and South Korea on Sunday.

The ongoing health crisis has affected global trade, including in ASEAN, with logistics disruptions, among other issues. In the January-September period, the value of Indonesia’s exports to ASEAN was down by 15.4 percent year-on-year (yoy) to US$26.2 billion and imports by 25.6 percent yoy to $21.8 billion, according to Trade Ministry data.

However, the trade of the 152 essential goods among ASEAN member states had not been subjected to any obstacles, according to Yudi.

The MoU was intended to promote a more open trade for these goods and reflect the region’s contribution to handling the pandemic, said Yudi. However, the agreement was more of a “political gesture” and it could not be disputed in case a country did not comply.

Read also: ASEAN to sign COVID-19 recovery framework, RCEP

“Indonesia participates in taking ASEAN’s strategic measure to fight the COVID-19 pandemic and recover the region’s economy through a collective commitment in handling non-tariff barriers for essential goods,” Trade Minister Agus Suparmanto said in a statement on Tuesday.

ASEAN also agreed on the Comprehensive Recovery Framework (ACRF), according to Coordinating Economic Minister Airlangga Hartarto.

The framework outlines the bloc’s five strategies to recover from the pandemic, namely improving the healthcare system, strengthening people’s resiliency, maximizing the potential of the intra-ASEAN market and speeding up digitalization.

“Indonesia seeks to make this program not business as usual and encourages relevant sectoral agencies to carry out the initiative according to the timeline,” Airlangga said in a press release on Tuesday.