Indonesia monitors non-tariff challenges facing plantation and forestry commodities
The Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that the government is closely monitoring various challenges and non-tariff barriers affecting Indonesia’s plantation and forestry commodities.
“In terms of plantations and forestry, we are seeing non-tariff barriers from Europe, specifically what they call the EUDR (European Union Deforestation Regulation). The implementation of the EUDR has been delayed until next year, meaning international pressure has also pushed back its enforcement,” said Minister Airlancga in Jakarta on Tuesday.
Furthermore, he noted that another policy potentially challenging Indonesia is the Carbon Border Adjustment Mechanism (CBAM), a cross-border carbon tax implemented by the European Union for high-emission imported products.
“CBAM will be applied to industries with relatively high carbon values, or industries where electricity does not originate from green energy. This is also a form of trade barrier being driven by European nations,” Airlangga remarked.
Beyond the European Union, other obstacles are emerging from the United States through the Global Excess Steel agenda. The US has implemented measures regarding the global oversupply of steel to protect its domestic manufacturing industry by imposing high tariffs of 50 per cent on foreign steel imports, including products from Indonesia.
“Regarding tariff barriers, there is the issue of global steel. Recently, the US organised the Global Excess Steel agenda, where steel is considered a strategic commodity, essential not only for civilian needs but also for military and space applications,” Airlangga explained.
“Consequently, they are very concerned about the existence of steel mills and the steel industry within their own borders, whether in Europe or America,” he added.
He stated that these policies have a direct impact on steel products from Indonesia. According to the Minister, these trade policies require Indonesia’s attention, while simultaneously preparing similar measures to ensure domestic industries remain competitive.
“Furthermore, to ensure that the domestic market can be enjoyed by local producers, which is essential for job creation and economic growth,” Airlangga concluded.