JAKARTA: The Indonesian market could be a testing ground for Palestinian exports’ competitiveness following the introduction of a zero tariff policy.
An agreement with Indonesia on import tariff waivers for Palestinian products came into effect in mid-February after 2.5 years since the idea was floated by members of a Palestinian trade delegation attending an international trade expo in Jakarta in Oct 2016.
The initial waiver will apply to fresh and dried dates, and virgin olive oil. Palestine has asked for about 20 export products to be included in the policy.
Tariffs previously were set at 5 percent.
Djatmiko Bris Witjaksono, director of foreign trade analysis and trade center at the Ministry of Trade, said the agreement offers preferential treatment for Palestinian imports, but it will be up to the business community to show its willingness to buy the products.
“Palestine may have to compete with similar products imported from other countries. If the supply and product continuity is reliable, importers will eventually buy from them,” he told Arab News.
“The tariff exemption is significant and should be reflected in the products’ pricing in the market. Eventually it will boost the competitiveness of Palestinian products in Indonesia.” Witjaksono said.
Shinta Widjaja Kamdani, vice chairwoman of international relations at the Indonesian Chamber of Commerce and Industry, said the zero tariff policy will boost trade between the two countries.
“Now we have to look at the market opportunity to identify the goods from Indonesia we can export and vice versa. It looks like there is a market there for our food and beverage products,” she said.
Trade Minister Enggartiasto Lukita said the elimination of Indonesian tariffs on Palestinian dates and olive oil began on Feb. 21, when Indonesia’s Foreign Ministry sent a diplomatic note to Palestine.
Zuhair Al-Shun, Palestine’s ambassador to Indonesia, was also told about the tariff move in a meeting with Indonesian Vice President Jusuf Kalla on Feb. 28.
“We hope we will be able to enjoy Palestinian dates in the upcoming Ramadan,” Lukita said.
Both countries are considering expanding the policy to create a preferential trading agreement, the trade minister said.
Al-Shun said Palestine has provided a list of products to be considered for preferential treatment by Indonesia.
“The list is being reviewed by the Indonesian government. We also welcome Indonesian products that will be exported to Palestine,” Al-Shun said.
Lukita said the trade agreement is part of Indonesia’s unwavering support for Palestine.
Trade between Indonesia and Palestine was worth $3.5 million in 2018. Indonesian exports to Palestine include coffee, tea, bread and other foodstuffs, while dates and olive oil make up the bulk of its imports.
The zero tariff policy is expected to boost date imports by 11.62 percent within a year.