JAKARTA – For the sake of spurring exports to the Islamic Cooperation Organization (OIC) countries, the Government of Indonesia will maximize the formation of bilateral and regional trade agreements.
Expert Staff for International Relations at the Ministry of Trade Arlinda said, one of the biggest obstacles to Indonesia’s exports to OIC countries was tariffs. According to him, import tariffs in these countries are classified as very high.
“For this reason, we are currently trying to reduce tariffs in several OIC countries through trade pacts that we are discussing with a number of countries. Because the potential for exports to OIC countries is huge,” he said in the Discovering Opportunities to Access Halal Market of the OIC Workshop. Member Countries, Monday (2/9/2019).
He gave an example, import tariffs imposed by Egypt on products from RI reached 60%. According to him, almost the same tariff applies in several OIC countries.
He continued, for that reason, the government of the Republic of Indonesia hoped that with the trade cooperation pact between the Republic of Indonesia and several OIC countries, the import tariff of Indonesian products would be reduced to 0% – 5%.
According to him, so far Indonesia is negotiating the establishment of trade cooperation with several OIC member countries. The trade cooperation pact a.l. Indonesia-Iran Preferential Trade Agrement, Indonesia-Turkey Comprehensive Economic Partnership Agreement, Indonesia-Tunisia Preferential Trade Agrement, Indonesia-Pakistan Trade in Goods Agreement and Indonesia-Morocco Preferential Trade Agrement.
In addition, the Indonesian government is also conducting an initial assessment phase of cooperation between the Indonesia-Gulf Cooperation Council.
Meanwhile, the cooperation pact between Indonesia and the OIC countries that have been implemented are Indonesia-Pakistan Preferential Trade Agrement and Indonesia-Palestine Memorandum of Understanding.
Based on data from the Ministry of Trade, the value of Indonesia’s trade with the OIC country reached US $ 45.75 billion in 2018, up from the previous year which reached US $ 41.44 billion.
Last year, the value of Indonesia’s exports to OKI countries reached US $ 22.25 billion. Meanwhile, imports reached US $ 23.51 billion. That makes the Indonesian trade balance with the OIC country recorded a deficit of US $ 1.82 billion.