The Minister Of Trade M. Lutfi Openly Reveals The Challenges Of Breaking Into The UK Market Post-Brexit

Minister of Trade, M. Lutfi. (Photo: Doc. Ministry of Trade)

JAKARTA - Minister of Trade (Mendag) Muhammad Lutfi admitted that there are a number of challenges that must be faced by national businesses to enter the UK market after the country's decision to leave the European Union (Brexit/British Exit).

"After Brexit, there are still some major challenges for Indonesia to be able to enter the UK market," he said in a webinar entitled UK SME's Business Summit 2021 on Thursday, July 29.

According to the Trade Minister, this cannot be separated from Queen Elizabeth's desire to maintain the quality of goods and services that enter her country.

"English standards are very high and sometimes require a private certification which often burdens business actors, especially MSMEs," he said.

In addition, the Trade Minister also assessed that the pattern of trade with the UK has changed, not as much as in recent years.

“Some post-Brexit UK trade policies will also experience changes from previous EU rules. So, it can potentially become an obstacle for Indonesian exports," he added.

In order to overcome this, the government said he had succeeded in reaching an agreement through the signing of a contract of understanding to establish the Joint Economic and Trade Committee (JETCo).

"It is hoped that the JETCo can help identify and remove barriers to Indonesian exports entering the British market," he said.

To note, Indonesia and Britain have had bilateral relations for 72 years. In 2020, the UK is ranked 22nd as Indonesia's export destination, and is also ranked as the 20th source of non-oil and gas imports for Indonesia.

The total trade value between the two countries reached 2.2 billion US dollars. Of that amount, Indonesia still enjoys a trade surplus with the UK of US$327 million.

Meanwhile, the value of Indonesia's exports to the UK in 2020 is 1.28 billion US dollars, which includes footwear (foot wear), wood products, furniture, to CPO products and their derivatives.