KTNA: Zero Percent US Tariff Opens Export Opportunities for Indonesian Cocoa and Coffee
Jakarta (ANTARA) - The chairman of Kontak Tani Nelayan Andalan (KTNA) Yadi Sofyan Noor has assessed that the zero percent tariff exemption for Indonesian agricultural commodities to the United States market opens substantial opportunities for increasing exports of cocoa, coffee, and spices.
According to him, this reciprocal trade policy provides a broad opportunity for Indonesian agricultural products to penetrate the United States market, as that country requires supplies of commodities such as coffee, cocoa, and spices.
“The opportunities are certainly very large for exports such as coffee, cocoa and spices. In our view, it is actually America that needs products with zero percent tariff-free prices,” said Yadi when contacted by ANTARA in Jakarta on Monday.
He assessed that demand from the United States market has the potential to increase because the zero percent tariff scheme makes Indonesian product prices more competitive compared to other countries that still face import duties.
However, the increase in export demand is also expected to impact the availability of commodity supplies within the country if production is not significantly increased at the same time.
“(This policy) will affect the availability of supply and will certainly influence price increases in the domestic market,” added Yadi.
Therefore, he stressed the importance of maintaining a balance between export requirements and national supply.
Through the Indonesia-United States reciprocal trade agreement, a total of 173 tariff positions (HS Code) covering 53 groups of Indonesian agricultural commodities and their derivatives have been officially exempted from import duties to 0 percent in the United States market.
This strategic step opens wider access for domestic agricultural products to penetrate this global market whilst strengthening the competitiveness of Indonesia’s leading commodities amid international trade competition.
The agreement under the framework of the Agreements on Reciprocal Trade (ART) signed by President Prabowo Subianto and United States President Donald Trump represents part of strengthening economic partnership between the two countries.
Under this ART, there are 1,819 tariff positions for Indonesian products in both agriculture and industry, including palm oil, coffee, cocoa, spices, rubber, electronic components including semiconductors, and aircraft components, with a tariff rate of 0 percent.
From the agricultural sector, commodities receiving 0 percent tariff facilities include tropical fruits such as bananas, pineapples, mangoes, durians, and papayas; coffee with six tariff positions; green tea and black tea; as well as various strategic spices such as pepper, nutmeg, cloves, cinnamon, cardamom, ginger, and turmeric.
Additionally, cocoa and its derivatives, palm oil, palm kernel oil, as well as coconut fruit and coconut kernels are also included in the duty-free list. Processed fruit products, cassava and sago-based flour and starch, as well as potassium-based mineral fertilisers have also received the same facility.
Previously, at the Business Summit event at the US Chamber of Commerce in Washington DC, Indonesia and the United States also signed a number of Memoranda of Understanding (MoU) that strengthen the implementation of the reciprocal trade agreement.
With the exemption of 173 agricultural sector tariff positions to 0 percent, the government is optimistic that exports of national leading commodities will increase as the price competitiveness of Indonesian products in the United States market improves.