PalmOilMagazine, JAKARTA – Indonesia would keep developing bilateral cooperation with the United States of America (USA) and China when the two have trade issues. The two countries are strategic partners for Indonesia namely in Covid-19 pandemic. Minister of Trade Indonesian Republic, Muhammad Lutfi told that in virtual panel discussion “Mandiri Sekuritas”, Friday (29/1).
“Indonesia would do good cooperation with USA and China and become the solid partner in pandemic era though the two have trade war. USA and China play the big roles in trade of Indonesia and the reverse, Indonesia is the essential partner for the two,” he said, as in the official statement to PalmOilMagazine.
Lutfi also mentioned that Indonesia got special scheme through Generalized System of Preference (GSP) that the advantage could increase up to 15,2% in January to November 2020 with USA.
Besides, the inauguration of Joe Biden as the President of USA on January 20th, 2021 was the strategic moment for Indonesia and USA. The economic and trade prospect between both countries would be better. In addition, Joe Biden has published policy to support more conducive trade relationship and escalate open investment and trade.
Led by Joe Biden in USA and trade war that still occurs, Indonesia implements some trade policies, such as, optimizing GSP to increase the products competitiveness from Indonesia to USA; doing balance trade and investment approach by advantaging international bilateral agreement, expanding non-traditional markets; creating the better investment climate for USA and China, including the trade facilities and regional integration.
Meanwhile with China, Indonesia has had trade and investment cooperation through ASEAN-China Free Trade Agreement (ACFTA) and Regional Comprehensive Economic Partnership (RCEP). Trade facility in ACFTA gets better for the last years.
In January—November 2020, the exports from Indonesia to China increased 10,96% compared to the same period in last year. They were dominated by iron and steel reaching 23,7%, mineral reaching 21,48%, and palm oil reaching 10,63%. These showed that the exports to China increased massively in Covid-19 pandemic.
In his speech, Lutfi also re-emphasized that Indonesia is transforming to be the product exporter country with high technology which was as raw product and half product exporter.
The transformation took place in iron steel and vehicle. The commodities were the new phenomenon to exports in the future from Indonesia. The two sectors got highly values and promising ones.
“Years ago, it was not imaginable that in the very short time Indonesia would be the exporter of the commodities. For iron and steel Indonesia is the second biggest producer in the world after China. Indonesia exported more than 70% of iron and steel to China. In 2020 iron steel were the third non-oil and gas exports from Indonesia that contributed 7% or about US$ 10,85 billion,” he said.
He also told that the total trade of USA and China reached 30 percent of the total trade in Indonesia in 2020. “In the future Indonesia hoped to have good cooperation with the two countries and would be developing more too,” Lutfi said. (T2)