JAKARTA - Chairman of the Indonesian Employers' Association (Apindo) Shinta Kamdani assessed that cutting the import rate for Indonesian products from 32 percent to 19 percent was a much better economic diplomacy achievement.
"Our hope is of course as low as possible, but this also depends on negotiations with other countries. The important thing is that the rates imposed on us are lower than the competing countries," Shinta told VOI, Wednesday, July 16.
According to him, when compared to Thailand (36 percent), Laos (40 percent), Malaysia (25 percent), and Vietnam (20 percent), Indonesia's position is relatively more competitive.
This is an opportunity to maintain Indonesia's export competitiveness to the US market, especially for leading commodities such as textiles, footwear, furniture, and fisheries.
However, Shinta is still observing the development of negotiations between Indonesian competing countries that are still in process with the US.
"Constellation of regional competition can change rapidly, so we need to be vigilant," he said.
Indonesia is also committed to increasing the import of several strategic commodities from Uncle Sam's country, namely cotton, corn, soybeans, dairy products, and crude oil, which are considered important needs to support the domestic industry.
The move is part of a reciprocal scenario to respond to US concerns over the trade balance deficit.
However, Apindo emphasized the need for an in-depth evaluation of the impact of Indonesia's policy of eliminating Indonesia's import rates on US products, although most of these goods already have a low tariff (05 percent).
In the near future, Apindo will coordinate with export business actors affected to conduct a sectoral study of this new tariff policy.
The organization is also preparing mitigation proposals to the government, including encouraging penetration into non-traditional markets and accelerating the national decregulation agenda. Shinta also emphasized the need for improvement in the country to strengthen competitiveness.
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According to him, the success of Indonesia's exports does not only depend on tariffs, but also on structural reforms in terms of ease of doing business, logistics efficiency, energy availability, as well as regulatory quality and infrastructure.
"Progressive economic diplomacy must be accompanied by a strong industrial transformation. Especially for the labor-intensive sector, this is important so that we can maintain industrial resilience and open up more jobs," he concluded.
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