JAKARTA - The government has confirmed that the reciprocal trade agreement between Indonesia and the United States not only opens market access, but also has a control mechanism if there is an abnormal surge in imports.
To note, the President of the Republic of Indonesia Prabowo Subianto and the President of the United States Donald Trump officially signed the Agreement on Reciprocal Trade (ART).
The tariff agreement is contained in the document Implementation of the Agreement toward New Golden Age US-Indonesia Alliance which is the basis for implementing the Indonesia-US economic partnership.
Coordinating Minister for the Economy Airlangga Hartarto stated that the two countries would form a Council of Trade and Investment as the first forum to discuss trade and investment disputes.
"All investment issues and trade issues between Indonesia and America will be discussed first in the Council of Trade," he said in a press conference, Friday, February 20.
He added that this mechanism will be used if there is a spike in imports that is considered too high or disrupts the balance of trade between the two countries.
Airlangga emphasized that the Agreement on Reciprocal Trade has a vision to create mutual prosperity and a strong supply chain.
"I underline respecting the sovereignty of each country to be part of the agreement," he said.
According to him, with the work of council, if there is an abnormal spike in imports from both countries or at an unreasonable price, the mechanism will refer to international regulations as applicable in the WTO.
"So the first is related to the mechanism because we form a work of council so if there is a spike in imports from both countries that are considered abnormal or at prices that are not common, then of course regulations such as dumping in the WTO and others apply," he explained.
He emphasized that before any action was taken, this issue was first brought to the work of council so that access to the market for American goods and Indonesian goods would be maintained in a structured manner.
"However, previously it was first brought to the work of council so we already have a mechanism with America so of course access to the market for American goods, as well as access to the market for Indonesian goods that have jumped exports to America, so there is a mechanism," he said.
Meanwhile, this agreement is scheduled to take effect 90 days after all legal processes are completed in each country, including consultations with the DPR in Indonesia.
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