Indonesia-US Agree on ART, Here's the Content

Coordinating Minister for the Economy Airlangga Hartarto (Photo: VOI doc)

JAKARTA - 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 explained that after the signing at the level of heads of state, the technical discussion and the attachment of the ART continued at the office of the United States Trade Representative (USTR).

He said that a number of Indonesia's export flagship commodities now have duty-free access to the US market, namely at least 1,819 tariff lines of products.

"Both agriculture and industry, including palm oil, coffee, cocoa, spices, rubber, electronic components including semiconductors, aircraft components, whose tariffs are 0 percent," Airlangga said in an online press conference, Friday, February 20.

He added that for textile and garment products, the United States also provides a zero percent tariff through the Tariff Rate Quota (TRQ) scheme.

"Of course this provides benefits for 4 million workers in this sector, and if we count with families, this has a very significant impact on 20 million people in Indonesia," he said.

As part of the agreement, Airlangga added that Indonesia also provided zero-percent tariff facilities for a number of products from the United States, such as wheat and soybeans.

"So that the Indonesian people pay 0 percent for goods produced from soy beans or wheat, in this case noodles or in the form of tofu and tempe, so our people are not burdened with additional costs for raw materials that we import from the United States," he said.

Furthermore, Airlangga added that in accordance with the commitment at the World Trade Organization (WTO) forum, both countries agreed not to impose import duties on electronic transactions.

He explained that this policy was also in line with the treatment given to other partners, including European countries, as well as supporting the moratorium efforts at the WTO Ministerial Conference.

In addition, Airlangga added that Indonesia also encourages the implementation of cross-border data transfers on a limited basis and continues to refer to the applicable laws and regulations in the country.

"And also recognize that America will also provide protection for consumer data equivalent to the protection of consumer data treated in Indonesia," he explained.

He said Indonesia would implement strategic trade management to ensure that trade activities took place safely and were not misused for purposes other than those that had been set.

In addition, Airlangga added that the Government was also committed to providing ease in the import licensing process and product standardization, both for the industrial sector and companies from the United States.

In addition, he conveyed that Indonesia was also committed to reducing tariff and non-tariff barriers, as well as increasing regulatory certainty, especially in the information and communication technology (ICT), health, and pharmaceutical sectors.

Airlangga said that to ensure fair implementation, the two countries would form a Council of Trade and Investment forum which would be a forum for discussion if there was a spike in prices or an imbalance in the trade balance that exceeded the agreement.

"So all investment and trade issues will be discussed in the council if there is a higher increase and the country's trade balance. The goal is to secure a strong economic supply chain and respect the sovereignty of each country. This is part of the agreement," he explained.

Meanwhile, ART is scheduled to take effect 90 days after all legal processes in each country are completed, including consultations between the Indonesian Government and the DPR as well as internal procedures in the United States.