Behind several ASEAN nations’ imposition of duties on various Indonesian intermediary products

JAKARTA, INDONESIA — At least 14 countries — four of them ASEAN member countries — have imposed 37 import duties on Indonesia’s products, according to the nation’s Ministry of Trade.

Indonesia’s neighbour Malaysia imposes anti-dumping import duty (BMAD) on polyethene terephthalate (PT), cold-rolled stainless steel, as well as a safeguard duty (BMTP) on the ceramic floor and wall tiles products.

Thailand has also slapped BMAD on biaxially oriented polypropylene (BOPP) and BMTP on aluminium foil.

Vietnam imposed BMAD on polyester fibre yarn and sorbitol, while the Philippines places BMTP on Indonesia’s motor vehicles.

The Philippines also imposed BMTP on galvanised iron and aluminum zinc (GL) sheets, coils and strips, galvanized iron sheets, coils and strips LLDPE and HDPE.

Besides the aforementioned ASEAN nations, other countries such as Australia, Turkey, the United States, and Canada also followed suit, Detik reported.

What do those duties mean?

Rusli Abdullah, an Institute for Development of Economics and Finance economist told TOC that the implementation of such a duty indicates Indonesia’s readiness to enter a new phase of economic transformation — meaning that the country has produced intermediary goods, from exporting raw materials.

“So far, Indonesia has exported raw materials. But when it can export intermediary goods, these countries get into a panic. [Goods] like aluminium foil, motor vehicles, for example,” Rusli stated in a telephone interview.

The expert claimed that a country can impose such a duty to prioritise its local sector.

Earlier this year, the Philippines decided to restrict car import to protect its local automotive market, the Philippine News Agency reported.

Indonesia produced 1,286,848 motor vehicle units, in 2019 — a far more significant amount than the Philippines, which only manufactured 95,094 units that year.

“When it comes to the ban on industrial product import, we can wonder why it happens? If it is an agricultural product or meat, for example, it is normal. For example, Indonesia must make sure that imported is certified as halal for Muslims,” Rusli explained.

“In the past, Indonesia steel producers protested the flood of imported steel, as imported stuff has threatened local industry,” he elaborated.

Intensive lobbying, stronger cooperation necessary: INDEF economist

Rusli claimed that the Indonesian government could intensify its lobby to convince ASEAN nations and other countries that Indonesia’s intermediary goods are high-quality.

“Lobbying is important. And if there is a dumping allegation, ask those countries to prove where we have gone wrong. The World Trade Organization (WTO) can settle the dispute.

“As long as we can solve the problems nicely, hope there won’t be any disputes involving ASEAN nations brought to the WTO,” the economist stated.

“Regarding issues with ASEAN nations, it is better that we sit down and negotiate, not kill each other’s industry,” the former reported said, adding that ASEAN plays a role in driving the global economy.

Based on the ASEAN Secretariat data in 2016, ASEAN countries’ population accounted for 8.7 per cent of the world’s population.

In 2015, ASEAN contribution to the global GDP reached 3.3 per cent, the World Bank data showed.

Despite the global economic uncertainty, ASEAN’s trade rose 23.9 per cent to US$ 2.8 trillion in 2018 from US$ 2.3 trillion in 2015, the ASEAN Integrity Report in 2019 showed.

“ASEAN member countries can complement each other. For example, a country may excel in certain industries, while others may be good at other sectors,” Rusli wrapped up the interview.

Source : https://www.theonlinecitizen.com/2021/02/04/behind-several-asean-nations-imposition-of-duties-on-various-indonesian-intermediary-products/

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s