JAKARTA: Indonesia and Palestine have signed an agreement that will allow for zero tariffs on some Palestinian goods imported into Indonesia from next month.
The agreement is a follow-up to the Memorandum of Understanding that Trade Minister Enggartiasto Lukita and his Palestinian counterpart signed on the sidelines of the 11th World Trade Organization Ministerial Conference in Buenos Aires, Argentina, last December. The MoU allows zero import tariffs for certain goods between the two countries.
“It will be one-way trade from Palestine to Indonesia at the start, but we expect in the future it will be a two-way trade,” the Trade Ministry’s Director General for International Trade Negotiations Iman Pambagyo told Arab News.
The initial Palestinian products that will be exempted from import tariffs are fresh and dried dates and virgin olive oil. Pambagyo said that, during the first year of the agreement, dates imported from Palestine are estimated to increase by 11.62 percent, while olive oil is estimated to jump by 172 percent, as a lot of Indonesian cosmetic manufacturers use olive oil as an ingredient in their products.
“We will encourage our importers to benefit from this policy by sourcing their olive oil and dates from Palestine,” Pambagyo added.
Fachry Thaib, head of the Middle East Committee at the Indonesian Chamber of Commerce, said the business community welcomed the agreement and its upcoming implementation.
“We have always encouraged the government to expedite the MoU implementation. This policy would be beneficial for importers since it would make the products more competitive in the domestic market,” he told Arab News.
He said the policy will not hit other imported goods, given the big market opportunities for dates, which are widely consumed by Indonesians.
Lukota and Palestinian Ambassador to Indonesia Zuhair Al-Shun signed the agreement on Monday following the ratification of the MoU into a presidential regulation in April.
The finance minister will allow the MoU to fully take effect by issuing two ministerial regulations — on import tariff waivers for Palestinian products and on the technical direction for customs offices to execute the policy.
Pambagyo said these regulations will be circulated to all ports of entry so that customs officers can identify products from Palestine and exempt them from any import duties.
Lukita said this policy was part of Indonesia’s unwavering support for the Palestinian issue, which has always been the focus of its foreign policy.
“This is in accordance to President Joko Widodo’s instruction to facilitate what the Palestinian people need and for us to import their products,” Lukita told a press conference after signing the agreement.
“It shows that Indonesia also supports Palestine through trade, not just through [foreign] policy,” Lukita added.
Apart from dates and olive oil, Lukita said Indonesia will welcome other goods from Palestine and will also export Indonesian goods to Palestine.
“But we are still waiting from the Palestinian side the list of goods that they need from us,” he said.
Al-Shun said the policy will help to empower the Palestinian economy. “We hope this cooperation will continue to strengthen ties between Indonesia and Palestine, especially on trade,” he said through an interpreter.
Data from the Central Statistics Agency showed that, as of May this year, total trade between the two countries had reached $1.62 million, with a $195,500 surplus for Indonesia. Total trade between the two countries in 2017 was valued at $2.39 million, which consisted entirely of non-oil and gas commodities. Indonesia’s exports to Palestine last year totalled $2.05 million, while its sole import from Palestine was dates, which were valued at $341,000.
Indonesia has been a staunch supporter of Palestinian independence and has pledged to focus on voicing support for Palestine during its tenure as a non-permanent member at the UN Security Council in 2019-2020.