U.S. grants Indonesia's export products duty-free status

Mochammad N. Kurniawan, The Jakarta Post, Jakarta

The U.S. government has decided to scrap import duties on 11 Indonesian export products for a one-year period starting November, a senior official at the Ministry of Trade and Industry said on Wednesday.

The Director General of International Industry and Trade Cooperation, Hatanto Reksodipoetro, said the exemptions would help increase Indonesian exports to the U.S.

"It's good news for us. I hope these exporters can increase their exports," he said.

The 11 products exempted from U.S. import duties are: turpentine gum, tuna and skipjack, prepared or preserved snails, copper ores and concentrates, sorbitol, four types of plywood sheeting, rattan and palm leaf articles, and contact lenses.

Last month, U.S. President George W. Bush agreed to grant Indonesia duty-free status worth US$100 million for certain export products under the so-called Generalized System of Preferences (GSP) program.

The latest exemption from import duties is part of the U.S. government's pledge to help ailing Indonesia to recover from its economic crisis after President Megawati Soekarnoputri expressed her commitment to joining the global war against terrorism.

Hatanto said that the above 11 export products had been subject to import duties of between 5 percent and 10 percent over the last five years after they had managed to grab more than 5 percent of their respective U.S. market shares.

According to him, the U.S. statute disallows any foreign export products from controlling more than 5 percent of the U.S. domestic market. This is so as to protect local industry.

"But we found that the U.S. market share of those products shrank following the 1997 economic crisis," Hatanto said.

He added that the U.S. government would review the exemptions every year.