RI-US Trade Agreement, Airlangga Said He Encouraged Orders For Textile And Footwear Products

Coordinating Minister for Economic Affairs Airlangga Hartarto

JAKARTA - Indonesia has reached an agreement with the United States (US) to impose a reciprocal tariff of 19 percent.

Coordinating Minister for Economic Affairs Airlangga Hartarto said, one of the most obvious impacts by achieving a trade agreement with the US is that orders for textile, appraisal, and National shoes products have started running.

"One of the most concrete impacts is the announcement by President Trump at the beginning, then orders for textile, apparel, and shoe products have started. If it is not announced, then this order will not be given by trading partners in America. And of course this can result in reduced labor or layoffs," he said in his statement, Wednesday, July 23.

Airlangga said the government continues to strive so that Indonesian products can be present in more countries, so that investment can grow, jobs can be created, and people's welfare can be improved.

"Indonesia's strategic achievements in establishing international trade partnerships also demonstrate the government's strong commitment to strengthening Indonesia's position on the global stage," he said.

Airlangga said that by having completed an important agreement in the international trade sector, it is hoped that it will be able to have a direct impact on increasing national exports, stability of labor-intensive industries, to expanding market access for small and medium enterprises.

Airlangga said that in the latest agreement with the United States, Indonesia took strategic steps by offering direct purchases of US main commodities, such as energy and agricultural products.

According to Airlangga, this step is more effective than the gradual rate reduction scheme because it is able to have an impact on the trade balance in a short time.

He added, by going through direct purchases, Indonesia has a competitive advantage over other countries in the region, especially in the textile and footwear sector, which has been the backbone of a labor-intensive industry.

"So actually we import energy every year. So far, we have imported from various countries, including America, the Middle East, and various countries in Africa, so this is only shifting from those countries to America, not adding to our total imports," Airlangga added.

Airlangga emphasized that the purchase of a number of products from the US that will be carried out by the government within the framework of the latest trade agreement will not have a negative impact on Indonesia's trade balance.

According to him, this is because basically the purchase of a number of these products is needed by Indonesia, and so far it has been imported from several countries, so that only the source shift of the country of origin of imports is made.

He conveyed that a number of these commodities, including agricultural products such as wheat and soyabean, to energy products.

Airlangga said that the successfully agreed reduction in the resiprocal rate also provided strategic benefits for Indonesia, especially in maintaining economic growth, food security, and stability in the labor sector by protecting up to 1 million workers who depend on the labor-intensive industrial sector.

In addition, he conveyed that the competitiveness of Indonesian products in the global market, such as palm oil, is also getting stronger because it is increasingly in demand in the US and European markets.

"I said that if this was not given, Indonesia would be competitive, 1 million people would lose their jobs. So America wants to become a partner of Indonesia, the third largest democratic country and the largest economy in Southeast Asia," he explained.