Indonesia Is Prepared to Commit to WTO’s Bali Package on Global Trade

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By Tito Summa Siahaan (Jakarta Globe)

The Indonesian government says it is ready to commit to the new rules of the international trade regime.

The Bali Package comprises 10 different texts on three major issues, namely trade facilitation, agriculture, and least-developed countries (LDCs).

Trade facilitation is arguably the most important as it sets out guidelines for WTO member countries to bring down trade barriers.

The International Chamber of Commerce has estimated that an agreement on trade facilitation would boost international trade by $1 trillion.

Imam Pambagyo, the director general for international trade cooperation at the Trade Ministry, said that the government was committed to streamlining bureaucracy at borders and had set up a task force to handle the issues of trade facilitation.

“We will coordinate with the Finance Ministry’s customs and excise office to make this work,” Imam said in Jakarta on Tuesday.

The WTO allows countries to determine by themselves their entry into the trade facilitation pact.

Under the rules, there are three forms of compliance: full compliance one year after the meeting; notifying the WTO secretariat on a date for compliance but without any assistance; and notifying the secretariat on a date for compliance with assistance from developed countries.

“There are some aspects that we can implement immediately, some that we need time to prepare, and few that would require assistance with because we don’t know what exactly must be done. But overall, I think we fall into category B,” Imam said.

Iman rejected concerns that the deal on trade facilitation would lead to a flood of imported goods into Indonesia, saying the agreement was meant to provide equal play for all WTO members.

“The Organization for Economic Cooperation and Development has estimated that reducing the cost of trade by 1 percent would bring benefits of $40 billion, around 65 percent of which will go to developing countries,” he said.

The agreement on agriculture, which allows WTO member countries to exceed their maximum threshold for food subsidy, would not immediately lead to a government decision to expand its food security program, according to Imam.

“[But] for sure, it provides more policy space to expand the program,” he said.

On the issues of LDCs, Bachrul Chairi, the Trade Ministry’s director general for international trade, said on Monday that the government had introduced duty-free and quota-free privileges for products from poorer countries.