Indonesia rushing to complete several trade deals as a hedge

Indonesia is rushing to complete several trade deals to diversify its export market as a hedge against the impending tariff from the US, in a move welcomed by industry players.

- Wahyudi Soeriaatmadja

JAKARTA -

A top Indonesian official said South-east Asia's largest economy is seeking zero per cent tariff from trade deals with the European Union, which has 27 member countries.

It is also seeking a separate agreement with the Eurasian Economic Union, said Mr Susiwijono Moegiarso, the most senior bureaucrat at Indonesia's Coordinating Ministry for Economic Affairs.

The members of the Eurasian grouping are Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia.

Indonesia is, additionally, accelerating to ratify a December 2024 Comprehensive Economic Partnership Agreement (Cepa) with Canada, he told a panel discussion in Jakarta on July 22, organised by Bank UOB Indonesia.

"We are rushing now to complete trade deals as part of our effort to expand markets," Mr Susiwijono said, when asked by The Straits Times during the panel discussion.

"In the past two weeks, we have been travelling to a number of countries... and we have achieved concrete results," he had said at the session.

When asked by ST about the impact of the Indonesia-EU deal, Mr Edwin Kadir, Bank UOB Indonesia's executive director, said: "Palm oil, coffee bean, aroma essence (fragrance) are among the sectors that would most benefit from wider access to the European markets."

The US has set a 19 per cent tariff on most goods from Indonesia under a new agreement. Certain goods, including processed nickel, coffee beans and others that are not produced by the US, may get a lower rate.

The 19 per cent rate, decided on July 15, is significantly lower than the 32 per cent announced by the Trump administration in April. The US tariff is set to take effect on Aug 1.

Mr Susiwijono said that the expected deal with the EU will take effect in 2026.