US Removes Indonesia from Developing Countries List

TEMPO.CO, Jakarta - The US government has decided to remove a number of countries from the list of developing countries eligible to special differential treatments (SDT), including Indonesia. Economists say that this will not complicate Indonesia's trade position, as Donald Trump's policy to review the list of countries with anti-dumping duties leniencies does not make Indonesia a direct target.

According to Bahana Sekuritas' chief economist Satria Sambijantoro, America is doing this to make it easier for them to "apply anti-dumping duties or countervailing duties (CVD), so Trump can charge more from Chinese goods."

According to Satria, CVD is different from Generalized System of Preferences (GSP). CVD is the duty imposed by the government of the importing country to balance the price of the same product made domestically, and even out the prices of foreign products based on export subsidies obtained from the originating countries. 

"Meanwhile, the GSP is a facility provided unilaterally by the US to promote growth in developing countries, [and that is] not revoked," Satria said here on Monday, February 24, as reported by Bisnis.com.

To date, there are eleven Indonesian commodities subject to the CVD, including biodiesel, carbon, steel rods, frozen shrimp, Monosodium Glutamate (MSG), various types of polyethlene plastic, and more recently wind towers.

Meanwhile, there are 3,544 other Indonesian export products that still enjoy the GSP facility. 

Satria said that the US market remains very important for Indonesia's trade balance performance. Throughout 2019, Indonesia enjoyed a trade surplus that is "bigger when compared to India and the European Union," he said.

As per February 10, 2020, the US officially removed Indonesia and a number of other countries—including South Korea, Thailand, Singapore and Vietnam—from the list of developing and least-developed countries. With this policy, Indonesia will no longer receive special differential treatment (SDT) available in the WTO Agreement on Subsidies and Countervailing Measures.

BISNIS