Trade Minister Budi Reveals AFSRFA Has the Potential to Boost the Balance of Trade in Food in Indonesia

JAKARTA - Trade Minister Budi Santoso said the ratification of the ASEAN Food Safety Regulatory Framework Agreement (AFSRFA) has the potential to increase Indonesia's trade balance in the food sector by up to 634.83 million US dollars through the harmonization of food safety standards that facilitate trade and investment flows in the ASEAN region.

Budi said the agreement was also projected to increase national welfare (welfare gain) by 252.17 million US dollars.

"Based on the study conducted by the Ministry of Trade, this agreement will encourage an increase in investment flows in the food sector through a reduction in the cost of compliance with the stabilization of domestic food prices and an increase in the purchasing power of the Indonesian people," he said as quoted by ANTARA, Tuesday, July 21.

With this agreement, said Budi, commodities that are projected to increase exports include agriculture, vegetable oils and fats, and other processed food products.

He explained that the ASEAN Food Safety Regulatory Framework Agreement is an agreement that regulates technical aspects and cooperation in the implementation of the ASEAN Food Safety Policy (AFSP).

According to him, the main purpose of the agreement is to increase consumer health protection as well as facilitate safe food trade in the ASEAN region through the harmonization of regulations and the elimination of various technical barriers.

"The main objective of this approval is to improve consumer health protection and increase the flow of safe food trade in the ASEAN region through harmonization of regulations and the removal of technical barriers," he said.

Budi said the scope of the agreement includes arrangements for requirements, processes, and coordination mechanisms for the implementation of food safety standards along the food supply chain throughout the ASEAN region.

He assessed that harmonization of regulations would provide certainty for business actors so that they could reduce compliance costs while strengthening the competitiveness of Indonesian food products in the regional market.

To ensure the optimal implementation of the agreement, the government has prepared a number of mitigation steps, including drafting and harmonizing laws and regulations as the basis for implementing the agreement.

In addition, the government will develop a letter of origin (SKA) automation system so that exporters can automatically utilize the preferential tariff facilities available in various trade agreements.

The government will also strengthen policies and governance of trade security instruments to protect domestic industries, increase socialization to stakeholders so that the benefits of the agreement can be maximized, and accelerate the digitization of food security systems based on traceability to support Indonesia's integration into the ASEAN food trade network.