Jakarta (Indonesia Window) – The Indonesian Ministry of Trade seeks to increase non-oil and non-gas exports to boost the recovery of the country’s economy which has been deeply hit by the COVID-19 pandemic, among others by optimizing international trade agreements.
“To achieve the target of non-oil and non-oil gas export growth, we should open the Indonesian market and collaborate with various countries through existing trade agreements. This is also an effort to increase the added value of each exported product,” Trade Minister Muhammad Lutfi said in a written statement on Thursday (Feb. 11).
Some of those trade agreements are the Regional Comprehensive Economic Partnership (RCEP); Indonesia-Korea Comprehensive Economic Partnership Agreement (IKCEPA); Indonesia-Pakistan Preferential Trade Agreement (IP-PTA); Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA); and Indonesia-Chile Comprehensive Economic Partnership Agreement (IC-CEPA).
The trade minister noted that Indonesia’s trade balance in 2020 recorded a surplus of 21.7 billion U.S. dollars, the highest since 2012.
Meanwhile, exports during 2020 only decreased by 2.6 percent (year-on-year YoY), while imports fell by 17.3 percent (YoY).
“There are three biggest sources of Indonesia’s trade balance surplus, namely the United States (11.13 billion U.S. dollars surplus), India (6.47 billion U.S. dollars surplus), and the Philippines (5.26 billion U.S. dollars surplus),” Lutfi pointed out.
Meanwhile, the five export products with the highest positive growth in 2019/2020 (YoY) were steel at 46.84 percent, jewelry 24.21 percent, crude palm oil (CPO) 17.5 percent, furniture 11, 64 percent, and footwear 8.97 percent.
According to the trade minister, in 2020, the steel commodity ranked third in Indonesia’s non-oil and non-gas exports with a contribution of 7 percent or 10.85 billion U.S. dollars.
Indonesia is the second largest producer of iron and steel in the world after China. In fact, more than 70 percent of Indonesian steel is exported to this country.
Jewelry is also a mainstay of Indonesian exports. Jewelry products in 2020 ranked fifth in Indonesia’s non-oil and non-gas exports with a contribution of 5.3 percent with a value of 8.2 billion U.S. dollars. Nearly 80 percent of jewelry products are exported to Singapore, Switzerland and Japan.
In addition, to ensure the continuation of exports, the government will continue to oversee and ensure the security of trade in Indonesian products abroad with trade diplomacy.
During the COVID-19 pandemic, there were 37 cases of trade security from 14 countries, consisting of 24 anti-dumping cases and 13 safeguard cases.
“The government is also committed to undergoing a standard process for dispute resolution at the WTO (World Trade Organization) regarding Indonesian raw materials and trade barriers for biodiesel products made from palm oil by the European Union,” Trade Minister Lutfi said.
Reporting by Indonesia Window