Trade relief package comes in June

The Jakarta Post, Jakarta

A preliminary decision by the United States Congress on Indonesia's proposal for post-tsunami trade relief is expected to come in June, says an official at the Indonesian Embassy in Washington.

"Congress will gather comments from all stakeholders regarding the preliminary decision expected to be issued in June," Iman Pambagyo, the embassy's commercial attache, said here on Friday after a bilateral trade meeting between the U.S. and Indonesia, adding that the latter officially submitted the proposal to the U.S. government on March 7.

According to Iman, four measures have been proposed: preferential cuts in import duties, suspension on all Indonesian dumping and subsidy cases, the provision of capacity-building facilities in the area of sanitary and phitosanitary (SPS) and granting the status of "Qualifying Industrial Zone" for local bonded zones.

He said Indonesia proposed preferential tariff treatment for 207 detailed groups of products, on which import duties range between 2 percent and 7.5 percent.

"We handpicked the product categories, prioritizing those with significant export value," he said.

The scheme is formally known as the Generalized System of Preference (GSP) program, under which developed countries grant preferential duty cuts for selected products from developing countries.

Iman said developed countries usually granted capacity building facilities through training.

"SPS capacity building is very important for us, especially for our agriculture and fisheries sector. We surely want to have healthier products, not only for our export customers but especially for fellow Indonesians," he said.

Furthermore, a Qualifying Industrial Zone status would allow local bonded zones such as Batam to play a role in preferential trade agreements formed between the U.S. and any neighboring countries, in this case Singapore.

Aside from the U.S., the European Union also offers a similar GSP scheme. The EU has so far granted trade preference only for footwear products. Indonesia is still expecting an EU decision on treatment for local tuna, shrimp and textiles, among other things.

The world poured millions in aid into countries devastated by the Dec. 26 tsunami that claimed over 280,000 lives. The more developed countries have also offered some trade relief.