Indonesia to rely on trade agreements to boost exports: Minister

MACROECONOMICS - JAKARTA. Indonesia’s trade deficit this year, which reached US$7.5 billion in November, has forced the government to find a way to boost exports.

Trade Minister Enggartiasto Lukita said on Thursday the government could not increase exports significantly this year because of various barriers, particularly the high tariffs imposed on Indonesian products that made them less competitive than the products produced by competitors.

“We face high entry tariffs because we have no trade agreements,” Enggartiasto said in Jakarta on Thursday, adding that the ministry would accelerate trade negotiations with a number of countries and organizations.

He said the government was now negotiating with Mozambique, Tunisia and Morocco, as well as with the European Union and the Regional Comprehensive Economic Partnership (RCEP) to establish trade agreements.

However, he admitted that negotiations with the EU and RCEP were not easy because they involved a large number of countries, but the government would attempt to complete the negotiations next year.

Enggartiasto also said the Trade Ministry had already discussed boosting the export of certain commodities. Although he did not go into detail about what was being done, he made assurances that the government had tried to solve various problems to boost exports.

“Our domain is to immediately complete the trade agreements,” he added, as quoted by kompas.com.

On Monday, Statistics Indonesia announced that November’s trade deficit was $2.05 billion, higher than the $2.03 billion recorded in July, which was then the highest deficit in the last five years. The November data brought the year-to-date trade balance to minus $7.52 billion, with surpluses recorded only in March, June and September.