RI sees first trade surplus with Australia in five years
JAKARTA (JP): Indonesia's US$632 million trade surplus with Australia in the first eight months of the year is its first since 1993, a senior official at the Ministry of Industry and Trade said on Tuesday.
Director General of International Trade and Industry Cooperation Hatanto Reksodiputro attributed the surplus mainly to the decline in imports from the neighboring country.
Indonesia's exports to Australia reached $1.49 billion in the first eight months of this year, almost equivalent to the figure recorded in the same period last year. But a decline in imports from the neighboring country to $865 million during the same period resulted in the surplus favoring Indonesia.
"Although the surplus was due to the sharp drop in our imports from Australia, it has shown that there is great potential for trade between the two countries," Hatanto said in his written address at the opening of a workshop on the use of Generalized System of Preferences (GSP) facilities.
His address was read by the ministry's director for bilateral cooperation, Pos M. Hutabarat.
Hatanto said Australian exports to Indonesia were nearly cut in half in the first semester this year as most Indonesian companies faced financial problems due to the severe drop in the rupiah's value against the greenback.
Indonesia has suffered a deficit in its trade with Australia since 1993, but it had diminished in the past two years.
It dropped by 30 percent in 1997 to $909.3 million from about $13 billion the previous year as Indonesian exports to the neighboring country continued to increase.
Indonesia's exports to Australia reached $1.5 billion last year but its imports remained high at $2.4 billion.
The country exports ingots, iron and steel, cocoa, textiles, furniture and wood products to Australia, and imports live cattle, meat and dairy products, and machinery.
He noted that high import tariffs and strict quarantine regulations imposed on some animal and plant products continued to be obstacles to Indonesia entering the Australian market.
GSP facilities
Hatanto said the GSP facilities offered by the United States and the European Union were of little benefit to Indonesia.
The types of export commodities covered under the tax incentive package were limited and most Indonesian commodities could not meet the requirements, he added.
According to the Ministry of Industry and Trade, export products from Indonesia to the United States using GSP reached $1.9 billion in 1997. This was 53.9 percent of the $3.5 billion of the export value eligible to use the facilities, and 21.8 percent of the total export value to the U.S.
Exports of certain agricultural and industrial commodities from developing countries to the U.S. under the GSP facilities are exempted from customs duties. The U.S GSP facilities are provided to over 4,400 items from 140 countries.
Similar facilities are provided by European countries but they only reduce the import tariffs, instead of eliminating them, and mostly for industrial goods.
Export products from Indonesia to the European Union using the GSP reached ECU 4 billion, only 57 percent of the country's total export value of ECU 7.1 billion to the regional grouping.
Japan's GSP facilities are provided until March 31, 2001, to certain agriculture products and all industrial products.
Data from the ministry shows that Indonesia's exports to the U.S. in the first half of 1998 reached $4.3 billion, up 3.22 percent from $4.2 billion in the same period for 1997.
Exports to the European Union in the first semester this year reached $3.8 billion, up 4.36 percent from $3.7 billion in the equivalent period last year.
Meanwhile, Hutabarat said he expected the country's exporters could take advantage of the extension of GSP facilities from the U.S.
He said the program was scheduled to cease on Sept. 30, but the U.S government had extended it until September 2000. (gis)