Indonesia Reduces Tariffs

Qld Country Life

AUSTRALIAN sugar cane farmers have said moves to reduce the tariff on exports to Indonesia by 3 percent will level the playing field.

Indonesia has agreed to reduce tariffs on Australian raw sugar imports to 5 percent in exchange for eliminating import duties on Indonesian herbicides and pesticides as part of moves towards securing a new free trade deal.

Indonesian Trade Minister Enggartiasto Lukita met with his Australian counterpart Steven Ciobo last Wednesday in Jakarta as part of the ongoing negotiations.

Mr Ciobo said the tariff cuts reflected our shared ambition for completing the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

Indonesian pesticides and herbicides are expected to be more competitive in the Australian market and offer greater choice to consumers, while Indonesias processed food and beverage industries are set to benefit from lower raw sugar prices in meeting the demands of national and regional markets, the ministers said in a statement.

Mr Lukita said Indonesian President Joko Widodo and Australian Prime Minister Malcolm Turnbull – who revealed the farm trade exchange during talks in February – were determined to conclude IA-CEPA this year and we are doing all we can to make that happen.

Indonesian Trade Minister Enggartiasto Lukita (right) met with his Australian counterpart Steven Ciobo on Wednesday.

Australian Sugar Industry Alliance Chair and Chair of its Trade Committee Paul Schembri said his group was looking forward to Indonesia being restored as a major export destination for Australian raw sugar.

A 3 percent tariff cut is a good outcome for Australian farmers and millers and for Indonesian refiners who want access to our high-quality product at a competitive price, he said.

Australia was put at a disadvantage in 2015 when Indonesia granted Thailand a 5 percent tariff on sugar while Australia stayed at an effective 8 percent.

We went from supplying around a third of Indonesia’s sugar imports to almost nothing.

The final steps are now being taken to level the playing field and reduce the tariff on Australian sugar to 5 percent.

In thanking the Prime Minister, Trade Minister and their officials and representatives for their hard work on our industries behalf, Mr Schembri said the changes provided the opportunity to increase sugar exports to Indonesia to more than 1.25 million tonnes from their present level of 350,000 tonnes.