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Australia, Indonesia Agree To Tariff Cuts

by Mary Swire, Tax-News.com, Hong Kong

21 September 2017


Australia and Indonesia have agreed to proceed promptly with their plan to implement tariff reductions on key commodities.

The two sides have agreed that Indonesia will reduce tariffs on the import of Australian raw sugar, and that Australia will eliminate import duties on Indonesian herbicides and pesticides.

According to the Australian Government, these measures will boost Australia's sugar industry and Indonesia's chemical industry, and will provide flow-on economic benefits to both countries.

The Government also said that Indonesian pesticides and herbicides will be more competitive in the Australian market as a result, offering greater choice to consumers. It also expects Indonesia's processed food and beverage industries to benefit from lower raw sugar prices.

The Government did not however give a precise implementation date for the tariff cuts.

Talks are currently underway on a proposed Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA). Negotiations were first launched in 2010, and "reactivated" in March 2016 following a three-year hiatus. Both sides are hopeful that negotiations can be concluded by the end of the year.

Australian Trade Minister Steven Ciobo said that the latest tariff cuts to be announced "reflect our shared ambition" for the IA-CEPA.

Indonesia is Australia's 13th-largest trading partner. Two-way trade was worth AUD15.4bn (USD12.2bn) in 2016.

TAGS: tax | free trade agreement (FTA) | export duty | tariffs | trade treaty | Australia | food | agreements | tax rates | Indonesia | import duty | tax reform | trade

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