Indonesia’s Trade Strategy Moving Forward to Serve the World Indrasari Wisnu Wardhana Director General of Foreign Trade, Ministry of Trade Trade, Tourism and Investment Forum, ICE-BSD, 17 October 2019
The World Economy 2019 19 the World Economy grows at 3.2% Anti-Glob An lobaliz alizatio ation Countries adopting Import Restrictiveness Measures Multilateral Trading System has been challenged Ministry of Trade of the Republic of Indonesia – www.kemendag.go.id 2
The Indonesian Economy 2019 2025 — 2030 2050 300 million of The 3 rd largest The Indonesian Economy 3 population grows at 5.2% economy in Asia GDP per capita of Indonesia is the 16 th USD 15,000 000 largest economy The 4 th largest 4 in the world economy in the world 60% of population is 60% Indonesia is the 4 th in productive age most favourite investment destination 3 Ministry of Trade of the Republic of Indonesia – www.kemendag.go.id
Export Target in 2019 Top 6 Export Priorities Exports of Non-Oil and Gas grow by 8% reaching USD 175 billion in 2019 Exports 17,1 (USD billion) 15,7 18,6 13,1 175 162,8 153 131,8 132 2015 2016 2017 2018 2019 Furniture & Wood Products| Food & Beverages | Textiles & Non-Oil and gas Oil and Gas Apparel | Automotive | Electronic | Chemical Products Source: Ministry of Trade of Indonesia, 2019 Ministry of Trade of the Republic of Indonesia – www.kemendag.go.id 4
Internal factor: Indonesia’s main export products While the world demand consists of: 81% manufactured goods and 19% primary goods, 46% Indonesia’s exports are still resource-intensive products 5
External Challenges World Uncertainties • Trade War and Anti-Globalization • Brexit • Fall of commodity prices Ind ndus ustry try 4. 4.0 • The role of WTO is questioned 6 Mini nistr try of Trade of the Republic ic of Indonesia ia – www.kemendag.go.id
Indonesia’s Export Strategy Refocusing on export products from primary products to industrial or processed products and diversifying export products Improving import management Establishing trade agreements with Main Trading Partners and New Potential countries Expanding exports to non-traditional markets Intensifying promotion through Trade Expo, Trade Mission, and Business Matching Promoting Exports in Services Creating a conducive trade climate Ministry of Trade of the Republic of Indonesia – www.kemendag.go.id 7
Improving Bilateral Trade with Main Trading Partners Indonesia and US: bilateral trade target Signing of USD 50 billion Indonesia — Australia CEPA 4 March 2019 Indonesia and Korea: bilateral trade Indonesia and India: bilateral trade target target USD 30 billion in 2022 USD 50 billion in 2025 Ministry of Trade of the Republic of Indonesia – www.kemendag.go.id 8
Improving Exports in East Asia 50 50% % of Global Population G20 30% 30 % of Global Trade 28% 28 % of Global FDI RCEP RCEP FOUNDER Brunei. Cambodia. Indon dones esia. Laos. Malaysia. Myanmar. Philippines. Singapore. Thailand. Vietnam. Australia. China. India. Japan. South Korea. New Zealand. 9 Mini nistr try of Trade of the Republic ic of Indonesia ia – www.kemendag.go.id
Boosting Exports to Non-Traditional Markets 2016 2016 — 2019 2019 Target Concluded in 2020 1990 — 2015 Trade 15 Trade 8 12 Trade Agreements Agreements Agreements and Review and Review 1. Indonesia — Korea CEPA 1. Regional Comprehensive Economic 1. ASEAN Free Trade Area (AFTA) 2. Indonesia — Australia CEPA Partnership (RCEP) 2. ASEAN — China FTA (ACFTA) 3. Indonesia — Chile CEPA 2. Indonesia — EU CEPA 3. ASEAN — India FTA (AIFTA) 4. Indonesia — EFTA CEPA 3. Indonesia — Morocco PTA 4. ASEAN — Japan CEP (AJCEP) 5. MOU Indonesia — Palestine 4. Indonesia — Tunisia PTA 5. ASEAN — Korea FTA (AKFTA) 6. Indonesia — Mozambique PTA 5. Indonesia — Bangladesh PTA 6. ASEAN — Aus & NZ FTA 7. ASEAN — HK FTA & Investment 6. Indonesia — Turkey CEPA (AANZFTA) 8. ASEAN — Japan Inv, Service & MNP 7. Indonesia — Iran PTA 7. Indonesia — Japan EPA (IJEPA) 10 th AFAS 9. 8. Indonesia — Eurasia FTA 8. Indonesia — Pakistan PTA (IP-PTA) 4 th ACIA 10. 9. Indonesia — Djibouti PTA 11. ASEAN Framework in e-Commerce 10. General Review AANZFTA 12. Review Indonesia — Japan EPA 11. General Review AIFTA 13. Review Indonesia — Pakistan PTA 12. Indonesia — Pakistan Trade in Good 14. ASEAN Trade in Services Agreement Source: WTO, ASEAN Secretariat, Ministry of Trade 15. ASEAN Trade in Goods Agreement retrieved on 11 September 2019 10
Expo Ex ports ts En Enha hanc nceme ement nt Increasing Indonesia’s Competitiveness • Simplification of Exports procedure by easing of regulations of restrictions and prohibitions (Surveyor Report and Export License); The Government of • Supporting high value-added exports ( high & medium skill and high technology); • Optimizing trade remedies, safeguards, anti-dumping, and anti-subsidy. Managing Imports to Support Exports • Movements of controls from Border to Post-Border; • Easing the procedure to import intermediate goods for SME’s; • Continue to develop better online import-licensing system (INATRADE); • Increase the utilization of Bonded Logistic Center (PLB). Development of Trade Facilitation • Utilization of counter trade scheme; • Increasing business facilitation in Special Economic Zone (SEZ); • Implementation of the obligation of Letter of Credit for export of certain products; The Government of • increasing the utilization of certificate of origins and establishing rules of origin negotiations; • Improving INATRADE and OSS integration. Mini nistr try of Trade of the Republic ic of Indonesia ia – www.kemendag.go.id 11
Improvement of Exports Regulation 1. Eliminating Export License for Coffee, only required exporter registration (ET) – Ministry of Trade Regulations No. 109 Year 2018 2. Eliminating recommendation from Ministry of Energy and Mineral Resources for export of coal and coal product – Ministry of Trade Regulations No. 52 Year 2018 3. Simplification of export mechanism for Non-subsidy Urea Fertilizer – Ministry of Trade Regulations No. 114 Year 2018 4. Letter of Credit requirement for export of certain products, National Insurance and National Marine Freight – Ministry of Trade Regulation No. 94 Year 2018 jo Ministry of Trade Regulation No. 102 Year 2018. 5. Revoke the provisions of technical verification for export of Crude Palm Oil and the derivatives – Ministry of Trade Regulations No. 17 Year 2019 6. Exemptions of verification for export of other fuel (BBL) derived from Crude Palm Oil and derivatives – Ministry Of Trade Regulation No. 21 Year 2019 7. Exemption of verification for export of natural gas which directly distributed out of border through pipeline – Ministry of Trade Regulation No. 21 year 2019. Ministry of Trade of the Republic of Indonesia – www.kemendag.go.id 12
Propose osed d to Amend nd 1 Relaxing LS and recommendation, and improvement of licensing management There are 11 Ministry of Trade Regulations related to import and 7 Ministry of Trade Regulations related to 2 export that are proposed to amend for improvement : 1. Ministry of Trade Regulations No. 85/M-DAG/PER/10/2015 Jo. 1. Ministry of Trade Regulations No 84/2016 Jo 64/M-DAG/PER/8/2017 concerning Provision of Import of Textile and Textile Product; Ministry of Trade Regulations No 12/2017 Jo 2. Ministry of Trade Regulations No. 125/M-DAG/PER/12/2015 concerning Provision of Ministry of Trade Regulations No 38/2017 Import of Salt; concerning Provision of Export of Forestry 3. Ministry of Trade Regulations No. 82/M-DAG/PER/12/2012 concerning Provision of Industry Product (PIK); Import of Cellular Phone, Handheld Computer and Tablets Computer; 2. Ministry of Trade Regulations No. 51 Year 4. Ministry of Trade Regulations No. 110 Year 2018 concerning Provision of Import of Iron 2012 concerning Provision of Export of Bird’s or Steel, Steel Alloy and derivatives; Nest; 5. Ministry of Trade Regulations No. 36 Year 2013 jo. No. 08 Year 2018 concerning 3. Ministry of Trade Regulations No. 109 Year Provision of Import of Plastic Intermediate Goods; 2018 concerning Provision of Export of 6. Ministry of Trade Regulations No. 40 Year 2009 jo. No. 09 Year 2018 concerning Coffee; Provision of Import of Glass Sheet; 4. Ministry of Trade Regulations No. 122 Year 7. Ministry of Trade Regulations 117 Year 2015 concerning Provision of Import of Sugar; 2018 concerning Provision of Export of Plants 8. Ministry of Trade Regulations No. 31 Year 2016 concerning Provision of Import of Non and Wild Animals Undefended by Law and included in CITES List; hazardous and non poisonous waste ( Limbah Non B3 ); 5. Ministry of Trade Regulations No. 53 Year 9. Ministry of Trade Regulations No. 97 Year 2015 jo Ministry of Trade Regulations No. 13 2019 concerning Provision of Export of Tin; Year 2018 jo Ministry of Trade Regulation No. 97 Year 2015 concerning Provision of 6. Ministry of Trade Regulations No. 21 Year Import of Forestry Product; 2019 concerning Provision of Export of Oil, 10.Ministry of Trade Regulations No. 44 Year 2019 concerning Provision of Import of Gas and Other Fuel; Horticulture Product; 7. Ministry of Trade Regulations No. 01/M- 11.Ministry of Trade Regulations No. 118 Year 2018 concerning Provision of Import of Used DAG/PER/1/2017 concerning Provision of Capital Good. Export of Processed and Purified Mining
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