he Indonesian Employers Association (Apindo) has stated that the competitiveness of Indonesian exports depends not only on tariffs imposed on Indonesia, but also on the treatment received by competing countries and Indonesia’s own costs of doing business.
“The key question is not only what tariff Indonesia gets, but what other countries get,” Apindo chairwoman Shinta Kamdani told reporters on Tuesday, referring to Indonesia’s competitors in labor-intensive industries such as textiles, garments and footwear.
Her remarks came after the announcement that Indonesia would be subjected to a 10 percent tariff under Section 301 of the United States Trade Act of 1974, which targets countries deemed not to have effectively enforced prohibitions against imports produced using forced labor, while still awaiting the outcome of the US investigation into alleged excess production capacity.
“Our main concern now is Cambodia. Cambodia [may] only get a 10 percent tariff, with no additional duties. It’s just the 10 percent tariff for forced labor, it [may] not be subject to excess-capacity tariffs. The Philippines is in the same position,” she said.
Along with Indonesia, Cambodia is among 16 economies awaiting the outcome of an excess capacity investigation by authorities in Washington, while the Philippines is not a target of the probe.
Shinta said Indonesia should focus on securing exemptions under its Agreement on Reciprocal Trade (ART) with the US, particularly for labor-intensive products.
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“One thing we need to pay attention to is the exemptions under our ART with the US. For example, textiles and garments could qualify for exemptions through special import quotas under the tariff-rate quota [TRQ] scheme,” she said.